Ransomware Attacks in Healthcare: Preparing and Protecting Your Organization

by Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP

Editor’s Note: Cybercrime Magazine predicts that global ransomware attacks will reach $11.5 billion in 2019 and that ransomware attacks will hit a business every 14 seconds by next year, with a new report revealing that 45% of ransomware attacks are in the healthcare sector.1 In a recent webinar for Bloomberg BNA, Manatt revealed how to prepare and protect organizations from the devastation of a ransomware attack. Manatt kicks off our two-part summary of the webinar below, with a review of the evolution of ransomware, key findings from Verizon’s Data Breach Investigations Report and a look at some common vulnerabilities in healthcare. Watch for part 2 of our summary—covering data breach preparation and notification, best practices to mitigate risk and the future of ransomware—in the September issue of “Health Update.” To view the full webinar free on demand, click here. To download a free copy of the webinar presentation, click here.


It’s no coincidence that some of the most significant ransomware attacks have targeted the healthcare and financial services industries, as well as municipalities and government entities. The reason for that is clear. At the end of the day, the people conducting ransomware attacks are extortionists. The greater the value of the information to the target, the more likely it is that the target will pay the ransom. The fact that healthcare entities are dealing with life-and-death situations increases the likelihood they will pay significant amounts of money to release their information, making them rich targets.    

The Evolution of Ransomware

Ransomware has evolved from a simple piece of code to a sophisticated attack vector and has become the weapon of choice for cyber criminals. Today, we are seeing ransomware being propagated on networks through wormlike activities. Not only are cyber criminals encrypting existing files, they are also encrypting backup files. In addition to strong encryption, they are using anonymous networks—such as The Onion Router (Tor), which was developed to anonymize Internet traffic—making it virtually impossible to trace them. Even the way that cyber criminals demand payment has evolved. Back in 2012, cyber criminals demanded payment through prepaid cards. Now, they are using digital currency—again, making it harder than ever to trace them.

The first ransomware came on the scene in 1989. It was called AIDS Trojan and was released through infected diskettes. The main weapon was very simple symmetric crypto—meaning it used the same key to crypt and decrypt. The first ransomware was fairly trivial—but it set in motion almost three decades of attacks. 

In 2006—almost 17 years after the first ransomware attack—a new strand was released using stronger, RSA encryption. (RSA is an algorithm used to encrypt and decrypt messages. It is asymmetric, meaning it uses two different keys.) The next major step forward in ransomware came in 2014 with the introduction of Tor technology, making it easy for cyber criminals to hide. Criminals also began using bitcoin, further protecting their anonymity.

Ransomware as a service started in 2015. Similar to software, ransomware as a service includes a toolkit with instructions on how to launch an attack. When they were first introduced, ransomware toolkits were selling for $1,000 to $3,000 on the dark web, and they are even cheaper now.

We saw “the year of ransomware” hit in 2016 with the advent of Locky—particularly malicious ransomware that spread aggressively through phishing campaigns and made headlines for infecting multiple hospitals in Kentucky, California and Kansas City, as well as countries outside the United States. The cyber criminals made big money from Locky, with several hospitals feeling forced to pay the ransom. Locky started the trend of phishing emails, leading to ransomware downloads in the healthcare industry. SamSam also was introduced in 2016 and continues to wreak havoc. SamSam is the ransomware that impacted Atlanta earlier this year, with the city paying nearly $2.7 million to respond to the attack.

Then, in 2017, the infamous WannaCry came onto the ransomware market. WannaCry not only infected files but also databases, multimedia and archived files. It also was the first ransomware to use Eternal Blue—a vulnerability within Microsoft Windows that is a kind of message blog used for communication purposes. With a wormlike capability, WannaCry spread like wildfire on the Internet. Between March 2017 and May 2017, it reportedly infected 150 countries and 200,000 systems in a single day. Fortunately, there was a researcher who was able to identify a kill switch, limiting the further spread of WannaCry. 

Unfortunately, ransomware as a service is not going away. In fact, in 2018, it is continuing to grow because it is both easy to use and lucrative for cyber criminals. We are also now seeing crypto mining emerging as a major issue. Crypto mining malware eats up huge amounts of CPU utilization on an infected system, slowing it down and consuming electricity while the cyber criminals do their work. 

In just the past two years, we have witnessed a significant rise in the number of hacking incidents. According to the U.S. Department of Health & Human Services (HHS), from 2016 through June 2018 there was a 315% increase in reported breaches. Between 2017 and 2018, the number of breaches soared by 107%. Clearly, these incidents are not just continuing but dramatically growing in number.

High-Profile Ransomware Attacks in 2018

A stream of high-profile ransomware attacks has hit healthcare entities in the first half of 2018, starting with Hancock Health and Allscripts in January. In July, LabCorp became the most recent ransomware victim in healthcare, after a breach put millions of patient records at risk and forced a shutdown of the network. The continued attacks point to a disconnect between the teams in risk management and IT security that can prevent creating the holistic approaches to risk mitigation that are essential to success.

Perhaps one of the most glaring examples of “what not to do” can be found in the cyberattack on the U.K.’s National Health Service (NHS). To say the WannaCry attack went viral is an understatement. It swept not only through 16 NHS trusts or regions in the U.K. but through 150 countries around the world, resulting in healthcare providers left without access to patient records. The situation could have been even worse if, as mentioned above, a researcher hadn’t discovered a kill switch within 24 hours and been able to slow down the global attack.

It’s questionable whether the NHS and the others ultimately affected were intentionally targeted—or whether their systems were just so bad that they got swept up in the attack. Approximately 90% of the equipment being used by the NHS was running on Windows XP—an extremely vulnerable operating system that is almost 20 years old. What’s even more troubling, due to a reported lack of IT resources, the NHS had failed to patch its more modern systems as well.  

The NHS had been warned for years about its vulnerability. However, because of the NHS’s fragmented IT network, it was impossible to manage risk, even though the threat of an attack had been pointed out time and time again. 

The NHS story includes the ultimate irony. One of the NHS trusts actually did plan ahead and had a contingency plan in place to respond to just the sort of attack it faced. There was only one big problem. The contingency plan was on the network, so there was no way to access it. Needless to say, the trust now keeps its plans on paper and has other forms of backup, in case it ever is a target again. It is both comic and tragic, however, that in formulating the original plan, the trust never considered that, in the event of an attack, the plan would be locked up by ransomware and would be unavailable.

Healthcare Highlights From Verizon’s Data Breach Investigations Report (DBIR)

Beginning 11 years ago, Verizon began compiling an annual analysis of real-world security incidents and confirmed data breaches. The information in the latest edition is supplied by 67 partners and covers thousands of companies across 65 countries. The DBIR analyzes who is being breached by industry and the types of organizations affected, as well as the methods, procedures and tools the perpetrators are using and the vulnerabilities that enabled the breaches to be successful. This information helps us anticipate the trends we expect to see going forward, as well as what organizations can do to address potential threats and protect themselves from attacks.

The analyses in the DBIR are based on real-world data backed by actual evidence. Unlike other resources, the DBIR is not survey based, since surveys can lead to differences in how people report and interpret information. In the DBIR, all contributors use a common framework and a common taxonomy for describing incidents. Downloadable free, it captures an accurate, cross-sectional view of the broader population of incidents and breaches. The latest edition covers 2,216 breaches and 53,308 incidents. Below we review some of the key findings.

Findings show that 73% of cyberattacks are perpetrated by external actors—people who are not part of the organization. Half of these breaches are carried out by perpetrators who are members of organized crime groups, built on the same concept as organized crime was decades ago but brought into the digital age. These groups have managed efforts around finding new victims, as well as identifying and exploiting their vulnerabilities. In addition to organized groups, there are unaffiliated actors who carry out breaches as “lone wolves” or in an anonymous, disconnected fashion that makes it impossible to associate them with any broader structure. Finally, there are “state-affiliated” perpetrators who are part of espionage campaigns—though these account for just 12% of breaches.

About a quarter of cyberattacks (28%) are perpetrated by internal actors—people who are part of the affected organization and either intentionally or inadvertently cause breaches. The percentage of internal actors driving breaches tends to be on the lower end but, over the past decade, it has continued to fall between 20% and 40%. Attacks by internal actors raise questions around an organization’s basic security hygiene and point to the need for implementing more advanced methods of identity authentication and access management. Most inside jobs tend to be the work of disgruntled employees—often following a merger or acquisition that brings a change in the organization’s direction, structure or culture. Acting to harm the organization is the employees’ way of getting back at an organization that is changing too quickly for them.

In past years, when looking for internal actors, the focus had been on the IT team because it has full access and rights to all of an organization’s systems and data. IT people have the “keys to the kingdom” so can do maximum damage if they go rogue. Breaches also can be committed by average users, however—and there has been an uptick in the number of breaches that are driven by doctors and nurses. Healthcare professionals have ready access to sensitive information. In many cases, they are the ones entering or extracting it for diagnostic, care or insurance purposes.

What motivates people to commit cyber crimes? Like most criminal activity, cyber crimes are financially motivated. The goal is to turn the stolen data into cash—with ransomware the prime example. In the past, the biggest worry was that someone would deface a website with a nasty message or picture. But the landscape has radically changed, and now the biggest concern is whether data will be compromised or stolen. A ransomware attack can cost an organization millions of dollars just to be able to continue its operations. 

In addition to the financial repercussions, ransomware attacks raise significant espionage concerns around intellectual property. This is particularly true in the pharmaceutical industry, where companies are developing new drugs, new formulas, new manufacturing techniques or new diagnostic equipment—and gaining access to information could give a competitor or even another country a major market advantage. Conversely, a perpetrator could disadvantage a victim organization by disrupting or even destroying its information.

Unfortunately, the number of ransomware attacks is skyrocketing. When we crunch the numbers, we see ransomware attacks doubling year over year. Just five years ago, when we ranked malware used in breaches, ransomware didn’t even crack the top ten. In the most recent report on breaches, ransomware was the number 1 malware being used. There are many reasons for ransomware’s popularity among cyber criminals, including that it can be attempted with little risk or cost to the actor, it can be successful without relying on stealing data, and it can be deployed across numerous devices to inflict greater harm and command maximum ransom payments. In addition, it can be used in opportunistic attacks against home computers, as well as in targeted strikes against business and government. 

Common Vulnerabilities in the Healthcare Industry

Healthcare organizations face many common vulnerabilities that put them at risk. Social engineering—including email attachments, downloads and free apps that cause employees to inadvertently install malware—is still a method used to infect organizations. Once an employee installs the malware on his or her computer, the malware can propagate across the entire network.

Cyber criminals also can conduct targeted attacks if a company has vulnerable ports or services that are accessible from the Internet. A prime example is the RDP port—a widely used remote desktop protocol that’s built into Windows. RDP has no security, including no authentication. Cyber criminals can just do a scan on the Internet and look for open ports, such as RDP or Server Message Block. Limiting ports that are accessible from the Internet is extremely critical, because they are the lowest hanging fruit for criminals.

Another major vulnerability is the granting of excessive permissions and the lack of access control. If hackers gain access to a network, the first thing they do is elevate their privileges. They look to steal an administrator’s account because an administrator has access to everything on the network. It’s critical to address excessive permissions and protect administrator accounts. The safest course is to limit access points and guard against having too many people with the authority to make changes to the system.

In addition, the lack of endpoint visibility can be a huge problem. An organization can’t protect its environment if it doesn’t know what is coming into and out of its systems. Organizations should have instant visibility into any devices that are connecting to their networks—and they should pair that visibility with an automated threat response. An automated threat response provides the ability to isolate or quarantine a compromised device, preventing propagation on the network. 

Lack of segmentation is another common issue. Networks should be built using an in-depth defense approach—with layers, such as firewalls and access controls—to thwart ransomware’s ability to move laterally on the network. 

Among the best protections an organization can put into place—particularly around social engineering issues—is an effective training program for employees. When looking for fake emails, it’s important to remember how much information is publicly available about people on social media. Often in spear phishing attempts, perpetrators have enough personal information or company information to make an email seem legitimate. Targeted attempts can be well-researched and appear credible. They are probably the trickiest to spot and, therefore, the hardest to protect against. Organizations may even want to implement a “bug bounty” program that provides an award to anyone who identifies a vulnerability on a company system or application.

Practices such as strong training programs and limited access are not just critical with respect to ransomware but are essential for good data security hygiene overall. These are the basic steps all organizations should be taking to protect their data and systems.          

1Beazley 2018 Breach Briefing, cited in Healthcare Informatics.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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