How to Build a TPRM Team That Actually Reduces Healthcare Risk (Step-by-Step Guide)
Post Summary
In healthcare, third-party vendors are essential but introduce cybersecurity risks that can lead to patient data breaches and operational disruptions. A dedicated Third-Party Risk Management (TPRM) team is critical for reducing these risks and ensuring compliance with regulations like HIPAA. Here’s how to build an effective TPRM team:
- Define Roles Clearly: Key roles include a TPRM Program Manager, Information Security Analyst, Healthcare Compliance Officer, Vendor Relationship Manager, and an Executive Sponsor. Each role addresses specific aspects of risk management.
- Focus on Skills: Combine cybersecurity knowledge, regulatory expertise, vendor management skills, and risk analysis capabilities within your team.
- Choose a Team Structure: Decide between centralized, decentralized, or hybrid models based on your organization’s size, needs, and resources.
- Leverage Automation: Use tools like AI-driven platforms to streamline routine tasks, allowing your team to focus on complex risk evaluations.
- Monitor and Improve Continuously: Regularly review vendor performance, track key risk indicators, and stay updated on regulatory changes to keep your program effective.
Building a TPRM team is about creating a system that actively mitigates risks, protects patient data, and aligns with healthcare regulations. The right mix of skilled professionals, structured processes, and automation tools can safeguard your organization from third-party threats.
Third-Party Risk Management 101: The Foundations for Building a Successful TPRM Program
Healthcare TPRM Basics You Need to Know
Managing third-party risks in healthcare requires a focused and ongoing effort to protect patient safety and meet regulatory requirements. This means understanding the core elements of a strong program and fostering teamwork across various departments.
Core Elements of Healthcare TPRM Programs
A solid TPRM program doesn’t just check boxes - it actively monitors vendor risks using well-defined criteria that align with healthcare regulations. It’s not a one-and-done process either. Regular reviews of vendor performance are crucial to address new risks and keep up with shifting compliance standards.
How Different Teams Work Together in TPRM
Success in TPRM depends on teamwork across multiple departments. IT teams handle the technical evaluations, while legal and compliance experts focus on regulatory requirements. Meanwhile, clinical and operational teams weigh in on how vendor decisions affect patient care. By combining these perspectives, organizations can make well-rounded and informed decisions about vendor risks.
Team Roles and Skills for Healthcare TPRM
Once you’ve got a handle on the basics of Third-Party Risk Management (TPRM), the next step is building a team with clearly defined roles and the right mix of skills. A strong TPRM team brings together expertise in cybersecurity and regulatory compliance to tackle the unique challenges of the healthcare industry.
Key Roles for Your TPRM Team
To run an effective TPRM program, you need a team with specific, well-defined roles:
- TPRM Program Manager: This person is the glue that holds the program together. They coordinate vendor assessments, manage key relationships, and ensure that risk management efforts stay on track. Typically reporting to the Chief Information Security Officer (CISO) or Chief Risk Officer (CRO), they act as the central point of accountability for the program.
- Information Security Analyst: These analysts focus on evaluating vendors' security measures. They review security controls, identify vulnerabilities, and ensure vendors meet cybersecurity standards. Their expertise often comes from backgrounds in areas like network security, penetration testing, or security architecture.
- Healthcare Compliance Officer: This role ensures that vendors comply with regulations like HIPAA and state laws. They verify that contracts include the necessary agreements and confirm that data handling practices align with legal requirements.
- Vendor Relationship Manager: Acting as the main point of contact with vendors, this person handles communication, coordinates security questionnaires, schedules risk assessments, and oversees remediation efforts.
- Executive Sponsor: This is the high-level leader who provides support and budget authority for TPRM initiatives. Often a C-suite executive, they help resolve interdepartmental conflicts and ensure that risk management aligns with the organization’s overall goals.
These roles create a framework for managing third-party risks in healthcare effectively.
Essential Skills for TPRM Team Members
A successful TPRM team combines technical expertise with strong interpersonal and analytical skills:
- Cybersecurity Expertise: Team members need a solid understanding of attack vectors, security frameworks like NIST, and risk assessment methodologies. These skills are critical for addressing the specific cybersecurity challenges in healthcare.
- Vendor Management Know-How: Navigating supplier relationships is no small task. Team members should be familiar with contract negotiations, service level agreements, and business continuity planning. Strong communication skills are key, as they’ll often need to bridge the gap between technical and non-technical stakeholders.
- Risk Analysis Skills: The ability to systematically evaluate threats is essential. Team members must know how to quantify risks, prioritize remediation, and present their findings in a way that resonates with leadership - focusing on business impact rather than just technical details.
Training to Strengthen Your TPRM Team
Keeping your team sharp requires ongoing training tailored to the healthcare industry:
- Industry Certifications: Certifications like Certified Information Systems Security Professional (CISSP) and Certified in Risk and Information Systems Control (CRISC) provide structured learning paths. CISSP covers a broad range of security topics, while CRISC zeroes in on risk management.
- Healthcare-Specific Training: Organizations like the Healthcare Information and Management Systems Society (HIMSS) and the American Health Information Management Association (AHIMA) offer courses tailored to healthcare cybersecurity and compliance challenges.
- Vendor-Specific Education: Many TPRM software providers offer training programs to help teams maximize the value of their tools. These certifications focus on best practices for using the platforms effectively.
- Threat Intelligence Briefings: Regular updates on emerging threats keep your team prepared. Resources like the Department of Health and Human Services’ cybersecurity updates and the Health Information Sharing and Analysis Center provide healthcare-specific threat intelligence.
- Cross-Functional Training: To improve collaboration, team members should understand how their work impacts other departments. For example, security professionals can benefit from learning about clinical workflows, while compliance officers should gain basic cybersecurity knowledge. This shared understanding leads to more practical and coordinated risk management decisions.
Step-by-Step Guide to Building Your Healthcare TPRM Team
Creating a solid Third-Party Risk Management (TPRM) team means understanding your risks, defining clear roles, and structuring your team to handle third-party threats effectively.
Step 1: Assess Your Current Risk Situation
Start by taking a good look at your organization's current third-party risk landscape. This step lays the groundwork for determining how large your team should be and the kind of expertise you'll need.
First, list all vendor relationships - everything from major electronic health record (EHR) providers to smaller tools like scheduling software and subcontractors. This catalog will give you a clear view of your vendor ecosystem.
Next, evaluate your current processes for vendor assessments, contract reviews, and ongoing monitoring. Are there gaps? For instance, maybe IT is conducting informal security checks while the legal team handles contracts independently, leaving coordination lacking.
Focus on vendors with access to sensitive data, like protected health information (PHI), or those tied to critical infrastructure. Review past security incidents to identify vulnerabilities and areas where your team will need to concentrate. Once you’ve mapped out your risks, you can assign responsibilities more effectively.
Step 2: Define Clear Roles and Responsibilities
With a solid risk assessment in hand, it’s time to define roles that cover all aspects of third-party risk management. Clarity here is key to ensuring accountability and smooth operations.
- First line of defense: These are the operational roles that interact directly with vendors. Vendor managers and procurement specialists handle onboarding, negotiate contracts, and monitor vendor performance. They need strong communication skills and a basic understanding of healthcare compliance.
- Second line of defense: This group includes risk management and compliance roles, such as TPRM Program Managers, Information Security Analysts, and Healthcare Compliance Officers. They oversee policies, perform risk assessments, and ensure vendor practices meet regulatory standards. These roles require technical expertise and a deep understanding of healthcare regulations.
- Third line of defense: Internal auditors make up this layer, providing independent checks on the TPRM program’s effectiveness. While not involved in daily operations, they need enough knowledge of your processes to evaluate whether the program is meeting its goals.
Clearly define who handles what. For example, decide whether a Vendor Relationship Manager or an Information Security Analyst will follow up on remediation efforts. Also, establish escalation paths - set thresholds for risks that require leadership attention while ensuring smaller issues don’t overwhelm executives.
Step 3: Choose Your Team Structure
The final step is deciding how to organize your TPRM team within your organization. Your approach - centralized, decentralized, or hybrid - will shape how well your team can manage third-party risks.
- Centralized teams: All TPRM functions are managed by one unit, often reporting to the Chief Information Security Officer (CISO) or Chief Risk Officer. This setup ensures consistency, clear accountability, and efficient resource use. However, it might lack specialized insights from individual departments and could create bottlenecks.
- Decentralized teams: Responsibilities are spread across multiple departments but coordinated through a central program office. This model works well for large health systems where different departments have unique vendor needs. For instance, a clinical department’s vendors may differ significantly from those of an administrative unit. While this allows for tailored expertise and faster decisions, it can lead to inconsistent standards and coordination challenges.
- Hybrid approach: A blend of both models, this structure centralizes high-risk vendor assessments and policy development but lets individual departments manage low-risk vendors. It balances consistency with flexibility but can be more complex to manage and requires strong coordination.
| Team Structure | Best For | Advantages | Disadvantages |
|---|---|---|---|
| Centralized | Organizations with unified processes | Consistent practices, clear accountability, efficient resource use | May lack departmental insights; potential bottlenecks |
| Decentralized | Large health systems | Department-specific expertise, faster decisions | Risk of inconsistent standards, coordination issues |
| Hybrid | Organizations with diverse risks | Combines consistency with flexibility | More complex to manage, requires strong coordination |
Your choice should align with your organization’s culture. A centralized model suits organizations with uniform processes, while a hybrid model works better for those with departments managing vendors independently.
Budget constraints will also influence your decision. Centralized teams can save money by avoiding duplicated expertise but may require a higher upfront investment in specialized staff and tools.
Keep in mind, your TPRM team structure doesn’t have to be permanent. Many organizations start with a centralized team and gradually add decentralized elements as their program matures. The key is to remain flexible as your needs evolve.
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Tools and Automation for Healthcare TPRM
Managing third-party risks in healthcare calls for a mix of skilled professionals and advanced automation tools. As healthcare organizations face increasingly complex challenges, automation and AI are becoming indispensable for streamlining processes while maintaining the human oversight necessary for patient safety.
How Automation and AI Support TPRM Efforts
Automation simplifies repetitive tasks, allowing skilled team members to focus on deeper risk analysis and critical decision-making. For instance, instead of manually combing through vendor security questionnaires, AI-driven tools can speed up the assessment process significantly.
Take Censinet AITM as an example - it helps teams complete vendor assessments faster by automating security questionnaire reviews, summarizing documentation, and generating detailed risk reports. What’s more, it allows experts to stay in control with customizable rules, ensuring no decision is made without proper oversight. This is especially important in healthcare, where vendor risks can have direct implications for patient care.
AI also enhances task management by routing assessments to the right stakeholders, including members of governance committees, for timely review and approval. With real-time data displayed in user-friendly dashboards, teams gain a centralized view of all policies, tasks, and decisions related to risk.
Platforms powered by AI allow teams to handle more vendor assessments without increasing headcount, addressing scalability challenges common in manual processes. This efficiency lays the groundwork for aligning risk assessments with established frameworks, ensuring consistency and compliance.
Leveraging Standard Frameworks for Risk Management
Automation is just one part of the equation. Aligning with recognized frameworks ensures that risk assessments are consistent and defensible. Instead of developing criteria from scratch, teams can rely on well-established standards that are already trusted by regulators and auditors.
- NIST Cybersecurity Framework 2.0: This framework organizes risk assessments into five core functions - Identify, Protect, Detect, Respond, and Recover. For example, when evaluating an EHR vendor, you can assess their ability to identify vulnerabilities, protect against threats, detect incidents, respond to breaches, and recover operations effectively.
- HITRUST CSF: Designed specifically for healthcare, this framework addresses multiple regulatory requirements, including HIPAA and HITECH, in a single assessment process. By using HITRUST, teams can reduce redundant evaluations while covering all healthcare-specific risks.
- SOC 2 Type II Reports: These reports provide standardized documentation that simplifies vendor evaluations. Instead of creating custom questionnaires for every vendor, teams can review SOC 2 reports and focus on any gaps or healthcare-specific concerns not addressed in the report.
Platforms like Censinet RiskOps™ integrate these frameworks into their processes, ensuring evaluations align with best practices while remaining flexible enough to meet an organization’s unique needs. Using standardized frameworks also streamlines communication with vendors, as they are better equipped to provide the required information quickly and accurately.
Automation vs. Manual Processes: Finding the Right Balance
A successful third-party risk management (TPRM) strategy combines automation with human expertise. Knowing when to use each approach is key to optimizing resources and improving outcomes.
| Process Area | Manual Approach | Automated Approach | Best Practice |
|---|---|---|---|
| Initial vendor screening | Time-consuming, subjective criteria | Quick filtering based on rules | Automate initial screenings, review borderline cases manually |
| Security questionnaire review | Thorough but slow | Fast, pattern-based processing | Automate routine reviews, manually analyze high-risk vendors |
| Evidence validation | Requires expertise, contextual insight | Consistent checks, flags anomalies | Use automation to flag issues, validate findings manually |
| Risk scoring | Nuanced but subjective | Objective and repeatable | Combine automated scoring with manual adjustments for context |
| Report generation | Customized but time-intensive | Standardized and fast | Automate standard reports, add manual insights for executive summaries |
| Ongoing monitoring | Reactive and labor-intensive | Continuous and alert-based | Automate monitoring, manually investigate alerts |
Automation brings speed and consistency to routine processes. It ensures that every vendor assessment follows the same criteria, which is critical for regulatory compliance. Automated systems also reduce errors, like missing required fields or overlooking expired certifications, and flag discrepancies in vendor responses that might go unnoticed during busy periods.
However, human expertise is irreplaceable for complex scenarios. For example, when a vendor experiences a data breach, automation can identify the issue and gather initial details, but experienced professionals must assess the breach’s impact on patient care and organizational security.
The best approach combines automation for repetitive tasks with manual review for nuanced cases. This hybrid model not only increases efficiency but also ensures critical decisions receive the attention they deserve.
Strategic Resource Allocation with Automation
With the right tools, teams can allocate resources more effectively. Instead of assigning senior analysts to data entry or report formatting, they can focus on higher-value tasks like managing vendor relationships, developing risk mitigation strategies, and collaborating across departments.
A well-designed TPRM platform should clearly indicate when automation is handling tasks and when human intervention is required. This transparency helps teams maintain oversight while benefiting from the efficiency and consistency of automation. By adopting these strategies, healthcare organizations can better manage third-party risks and enhance overall safety and compliance.
How to Maintain and Improve Your TPRM Program
Once your TPRM team is in place and monitoring processes are up and running, the real work begins - keeping your program effective as vendors and risks evolve. For healthcare organizations, this is particularly critical. About 62% of data breaches involve third-party vendors, with an average cost of $7.5 million per incident [1]. The 2023 MOVEit breach alone impacted more than 2,500 organizations and exposed data for 62 million individuals [1].
Regular Vendor Monitoring and Reviews
Shifting from periodic audits to continuous monitoring provides real-time insights into vendor performance and risks. This approach helps you focus efforts where they’re needed most, ensures vendors meet expectations, and supplies actionable data for reports to senior leadership and the board [2].
A key part of this strategy is tracking Key Risk Indicators (KRIs). Some important KRIs to monitor include outdated risk assessments, compliance rates, response times, unresolved issues, patching schedules, and access control reviews [1]. These metrics can highlight potential risks early, reducing surprises throughout the vendor management lifecycle [2].
Regulatory requirements, such as HIPAA Security 2.0, HITRUST, and various state-level privacy laws, now emphasize the need for ongoing vendor risk assessments and audit-ready documentation [1]. To meet these demands, your team must have systems in place to demonstrate compliance at a moment’s notice.
Building transparent communication with vendors is equally essential. Clear and open dialogue ensures faster incident reporting and more effective risk mitigation [1]. This transparency not only strengthens vendor relationships but also fosters quicker information sharing when issues arise.
Additionally, monitoring consumer complaints should be part of your oversight strategy. Regularly review both internal complaints and external sources like the Consumer Financial Protection Bureau (CFPB) database to identify potential reputation risks [2].
As you monitor and review, remain flexible. Adjust your processes to address new challenges and evolving threats.
Improving Your TPRM Program Over Time
Continuous improvement is just as important as continuous monitoring. Regularly evaluate your processes using structured feedback and performance reviews. For example, conduct post-incident reviews to pinpoint weaknesses and refine your approach.
Vendor feedback sessions can offer fresh perspectives. By surveying vendors about your assessment processes, you may uncover areas for improvement. Similarly, participating in healthcare cybersecurity forums can provide insights into how other organizations are adapting their TPRM strategies.
Staying on top of technology advancements is another critical aspect. Platforms like Censinet RiskOps™ often introduce new features that can enhance your team’s efficiency. Evaluate how automation tools and other innovations can complement manual reviews, helping you stay ahead of emerging risks.
Keeping up with regulatory changes is equally vital. Assign team members to monitor updates to laws and standards, assessing how these changes impact your operations. This ensures your program remains compliant and audit-ready.
Lastly, engaging stakeholders across your organization can make a significant difference. Regular meetings with clinical leaders, IT teams, and executives help align TPRM efforts with broader organizational goals. When your program supports these goals, it’s more likely to receive the resources it needs to thrive.
The best TPRM programs don’t treat improvement as a one-time task. By embedding a culture of continuous learning and adaptation, your team can stay responsive to new threats and organizational changes, ensuring long-term success.
Conclusion: Building a Strong TPRM Team for Healthcare
Creating a capable Third-Party Risk Management (TPRM) team isn't just about meeting compliance requirements - it’s about building a robust shield to protect your healthcare organization from the ever-growing risks tied to third-party vendors. With breaches involving these vendors often leading to expensive consequences, the importance of a strong TPRM team cannot be overstated.
The foundation of success lies in assembling a team with clearly defined roles that bring together expertise in cybersecurity, healthcare compliance, and vendor management. After all, even the most advanced tools are only as effective as the people using them when threats arise.
By leveraging automation and real-time monitoring, your team can keep an eye on key risk indicators, allowing them to move from simply responding to threats to actively preventing them.
An effective TPRM program is not static - it evolves. Regularly reviewing processes, incorporating vendor feedback, and staying on top of regulatory updates help ensure your organization remains resilient in the face of new and shifting threats.
As healthcare organizations increasingly depend on third-party vendors for everything from cloud services to medical devices, having a strong TPRM team in place is crucial. It’s your best bet for reducing risk, maintaining compliance, and safeguarding sensitive patient data.
FAQs
What skills should a TPRM team in healthcare have to effectively manage and reduce third-party risks?
A strong healthcare TPRM team brings together a mix of cybersecurity expertise, risk assessment skills, and vendor management capabilities, all grounded in a solid understanding of healthcare regulations like HIPAA. These are the cornerstones for assessing third-party security practices, performing detailed due diligence, and putting effective risk management strategies into action.
Just as important are communication and collaboration skills. These enable the team to work seamlessly with internal departments and external vendors, ensuring compliance with both security protocols and contractual obligations. With these skills in play, a TPRM team can address potential vulnerabilities head-on and protect sensitive healthcare information.
What’s the difference between centralized, decentralized, and hybrid TPRM team structures, and how do they affect healthcare risk management?
The way you structure your Third-Party Risk Management (TPRM) team plays a big role in how well your organization handles healthcare-related risks. A centralized structure brings stronger oversight and consistency, which is critical for staying compliant with regulations like HIPAA and tackling intricate cybersecurity challenges.
On the flip side, a decentralized structure gives individual departments the freedom to act quickly and adapt, making it easier to address specific risks without delays.
For many healthcare organizations, a hybrid structure strikes the ideal balance. It combines the strategic oversight of a centralized model with the adaptability of a decentralized approach, making it easier to stay compliant while responding effectively to ever-changing cyber threats.
How can automation and AI improve the efficiency of a healthcare TPRM team, and which tasks should remain human-led?
Automation and AI have the potential to transform how healthcare Third-Party Risk Management (TPRM) teams operate by taking over repetitive tasks like vendor risk assessments, vulnerability scans, and continuous monitoring. These tools can handle massive amounts of data at lightning speed, spot patterns, and flag risks, all of which help teams make quicker, more informed decisions.
That said, not everything can be left to machines. Tasks like strategic decision-making, analyzing complex cybersecurity threats, and understanding the specific dynamics of an organization still rely on human expertise. When automation works hand-in-hand with skilled professionals, TPRM teams can create a more efficient and well-rounded approach to managing healthcare risks.
