Universal Health Services Takes $67 Million Hit From Cyberattack
Healthcare services provider Universal Health Services (UHS) last week revealed that a cyberattack it fell victim to in September 2020 had an estimated financial impact of $67 million.
With more than 400 facilities in the United States, Puerto Rico, and the United Kingdom, UHS has roughly 90,000 employees and has reported close to $11.6 billion in net revenue for last year.
On September 29, the company announced that its operations in the United States were targeted in a cyberattack, which forced it to shut down its IT networks at multiple hospitals in the country.
Within one month after the incident, hospitals were able to resume normal operations, with technology applications restored at acute care and behavioral health hospitals, and re-established connections to all major systems, including electronic medical records, laboratory, and pharmacy systems.
The company insists that “no evidence of unauthorized access, copying or misuse of any patient or employee data has been identified,” but hasn’t provided specific information on the nature of the attack to date. Initial reports, however, suggested the Ryuk ransomware was involved.
In its 2020 fourth quarter and full year financial results report last week, the company revealed that the attack “had a pre-tax unfavorable impact of approximately $67 million during the twelve-month period ended December 31, 2020.”
“We estimate that approximately $12 million of the unfavorable pre-tax impact was experienced during the third quarter of 2020, and approximately $55 million was experienced during the fourth quarter of 2020,” the company said.
UHS also explains that the financial losses mainly consisted of diminished operating income due to lower patient activity and the associated billing delays. Labor expenses were also included, along with “professional fees and other operating expenses.”
The company also had to divert patients to competitor facilities and says it incurred expenses related to restoring information technology operations as fast as possible. It was also forced to delay certain administrative functions into December, which negatively affected operating cash flows.
“Although we can provide no assurance or estimation related to the receipt timing, or amount, of the proceeds that we may receive pursuant to commercial insurance coverage we have in connection with this incident, we believe we are entitled to recovery of the majority of the ultimate financial impact resulting from the cyberattack,” the healthcare services provider said.