Case Study | 25 August 2025
How a Digital Health Platform Incorporated Network Security in Its Infrastructure to Overcome Data Thefts & Patient Record Breaches
Posted by : Preeti Wani
A well-known U.S.-based digital health provider specializing in Electronic Health Records (EHRs) faced a massive data breach in 2021 that affected sensitive patient information and damaged its reputation. The incident led to regulatory penalties, financial setbacks, and a sharp decline in client trust. To recover, the company partnered with Research Nester, which made a detailed cybersecurity strategy involving advanced encryption, multi-factor authentication, regular audits, and compliance measures. Within two years, the firm restored customer confidence, regained market share, and returned to profitability.
An overview:
The company had been a trusted name in healthcare technology for more than a decade, granting secure storage and management of EHRs to hospitals, clinics, and private practices across the U.S. By 2020, it served more than 200 healthcare providers and held about 35% of the domestic market. However, in May 2021, the company disclosed one of its most serious cybersecurity failures. Hackers destroyed outdated systems to gain access to large volumes of patient information, including names, Social Security Numbers, medical histories, and insurance details. Alarmingly, the breach had gone undetected for several months, magnifying its impact.
Weak infrastructure and outdated software made the company vulnerable to attack, making it an easy target. Alongside the operational fallout, the company underwent strict investigations under HIPAA regulations and was penalized USD 2.5 billion. Realizing the urgent requirement to rebuild trust, the leadership asked for Research Nester’s expertise to develop a future-ready cybersecurity framework.
The Story
The data breach began in January 2021, when cybercriminals infiltrated the company’s database through unresolved vulnerabilities. Over some weeks, they extracted large amounts of sensitive data, which subsequently appeared for sale on the dark web. On May 21, 2021, the company found unauthorized copies of patient records circulating online. The disclosure caused immediate panic among clients, who feared lawsuits, regulatory scrutiny, and loss of patient confidence. The stolen data consisted of:
- Personal data such as names, gender, birth dates, and addresses
- Social Security Numbers (SSNs)
- Insurance and billing records
- Detailed medical histories
The consequences were critical:
- Regulatory penalties: HIPAA authorities penalized a USD 2.5 billion.
- Client losses: Several healthcare providers ended their contracts.
- Financial loss: The company reported USD 7.2 billion in losses in 2021, including penalties, legal claims, and a decline in customer base.
- Reputational damage: Market share fell from 35% in early 2021 to 8% by the year's end.
Despite several attempts to patch vulnerabilities and restrict further exposure, the company’s reputation had already been damaged. By late 2021, it became prominent that only a complete cybersecurity overhaul could restore credibility. That was when Research Nester was brought in to design a comprehensive recovery and protection plan.
Our Solution:
Research Nester conducted a comprehensive analysis of the company’s digital infrastructure and found some gaps, such as unpatched systems, weak authentication, limited encryption, inadequate data retention policies, and the absence of intrusion detection. To tackle these challenges, a multi-layered security strategy was developed, combining technical upgrades with regulatory compliance improvements. The key measures introduced are listed as follows:
Robust Encryption Protocols
- Implemented end-to-end encryption for data in storage and transmission.
- Integrated AES-256 encryption standards for all EHRs.
Multi-Factor Authentication (MFA)
- Needed MFA for all customers accessing sensitive data.
- Integrated biometric authentication for admin-level users.
Intrusion Detection & Prevention Systems (IDPS)
- Used real-time tracking systems to detect unusual activity.
- Automated alerts for unauthorized access attempts.
Strict Access Control and Information Retention Policies
- Applied role-based access controls (RBAC) systems.
- Restricted data retention to regulatory timeframes, lowering exposure risk.
Regular Security Audits and Patching
- Scheduled quarterly vulnerability scans.
- Established a patch-management team to ensure constant updates.
Regulatory Compliance & Policy Updates
- Collaborated with HIPAA compliance experts to make sure all systems were aligned to federal data protection guidelines.
- Updated privacy rules and communicated them clearly to clients.
Independent Cybersecurity Partnerships
- Engaged external cybersecurity firms for unbiased third-party audits.
- Obtained ISO 27001 certification to show global compliance.
Crisis Communication & Trust Rebuilding
- Launched a transparent client communication campaign.
- Set up a 24/7 support desk for healthcare providers to report and resolve data concerns.
Results
The execution of these measures delivered a strong turnaround for the company.
Financial and Market Recovery
- Profits in 2020 were USD 5.6 billion.
- In 2021, post-breach, losses totaled USD 7.2 billion, and market share collapsed to 8%.
- By the end of 2022, profits had revived to USD 5.2 billion, with market share exceeding 32%.
- By Q1 2023, market share rose to 38%, with stable growth estimated.
Reputation and Client Confidence
- Clients who had ended contracts reconnected with the platform after seeing the company’s security change.
- Independent certifications, ISO 27001, and HIPAA compliance seals were shown to demonstrate credibility.
- A survey performed in late 2022 revealed that 78% of old clients expressed renewed confidence in the company’s services.
Security Performance
- No major breach incidents have happened after implementation.
- Detection time for potential intrusions decreased from five months in 2021 to under 24 hours in 2023.
- Enhanced encryption and access control substantially lowered data exposure risks.
Long-Term Impact
- The company reestablished itself as a leader in secure digital healthcare solutions.
- Its strengthened systems attracted new relations with hospitals and insurers, prioritizing data security.
- By mid-2023, industry reports named the company as one of the safest EHR platforms in the U.S.
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