If you're a healthcare business, then it's important to be aware of the third-party risks that come with doing business with vendors. Third-party risk management (TPRM) is a process that helps organizations identify and manage these risks.

In this quick guide, we'll discuss what TPRM is, how it can help healthcare businesses, and some of the most common third-party risks involved with healthcare vendors.

Third-Party Risk Management: The Basics

So, what exactly is TPRM? TPRM is a process that helps organizations identify, assess, and manage risks that come from working with third-party vendors. This includes vendors that provide services, products, or software to the organization. When done properly, TPRM can help healthcare businesses avoid costly disruptions and improve patient safety.

Third-Party Risk Management Process

Different businesses employ different processes. However, the following 4 steps are fairly universal.

1. Identification - organizations need to identify all the third parties they work with, as well as the risks associated with each one.
2. Assessment - once all the risks have been identified, they need to be assessed. This includes understanding the likelihood of a risk occurring and the potential impact if it does
3. Management - this is where organizations develop plans to mitigate or transfer the risks. This may include things like insurance, contracts, or SLAs.
4. Monitoring - the final step in TPRM is ongoing monitoring. Organizations need to stay up-to-date on the risks associated with their third-party vendors and make sure that the vendor is meeting their obligations.

Why Healthcare Businesses Need TPRM

There are a number of reasons why healthcare businesses need to be aware of third-party risks and have a process in place to manage them. Here are just a few:

1. Patient Safety - one of the most important things for healthcare businesses is patient safety. TPRM can help identify risks that could potentially lead to patient harm.
2. Reputation - another key concern for healthcare businesses is their reputation. Anytime there's a risk of a data breach or other security incident, it could damage the business' reputation.
3. Regulatory Compliance - healthcare businesses are subject to a number of regulations, such as HIPAA. TPRM can help ensure that healthcare businesses are compliant with these regulations.

Common Third-Party Risks in Healthcare

There are a number of risks that come with working with third-party vendors, but some are more common in the healthcare industry. Here are a few of the most common third-party risks in healthcare:

• Data Breaches - one of the most common risks in healthcare is data breaches. This can occur when vendors fail to properly secure patient data or when there's a security flaw in their software.
• Privacy Violations - another common risk is privacy violations. This can happen when vendors collect or use patient data without their consent.
• Loss of Data - another risk is that vendor may lose patient data. This can occur if the vendor doesn't have adequate backup and disaster recovery procedures in place.
• Improper Disposal of Data - finally, another common third-party risk is improper disposal of data. This can happen when vendors don't properly dispose of patient data, such as by shredding or deleting it.

Third-party risk management is an important process for healthcare businesses. TPRM can help healthcare businesses identify and manage risks associated with third-party vendors. In this quick guide, we've discussed what TPRM is, how it works, and some of the most common third-party risks in healthcare. Stay tuned for part two where we'll discuss how to create a TPRM program.

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