This cautionary tale from the U.S. healthcare system points to a sector you should keep an eye on.

Today, I want to highlight a cautionary tale from the U.S. healthcare system.

Continue reading below to know more.

This cautionary tale from the U.S. healthcare system points to a sector you should keep an eye on.

A few delayed transactions here, a missed confirmation there…

In February 2024, Change Health , a company that processes more than 15 billion health care transactions for Americans, fell victim to a cyberattack conducted by ransomware group, BlackCat .

During the breach, hackers gained access to everything—from patient names to medical details and social security numbers of millions of Americans.

The hackers were able to gain access to Change Health’s network through stolen credentials.

They had access to the system for days, and when they’d finally gotten everything they wanted, hackers locked employees out of the network and demanded a ransom.

Until the ransom, which amounted to USD 22 million in bitcoin, was paid, no one could access Change Health’s systems that are critical in facilitating health care transactions.

As a consequence, hospitals couldn’t verify insurance, pharmacists couldn’t fill prescriptions, doctors were forced to scribble notes by hand, and in some instances, some providers started charging patients up front or delaying care altogether.

Pushing the Healthcare System to A Breaking Point

The exact same situation played out at the Pontchartrain Cancer Center in Southeast Louisiana.

… and the bad thing about this?

This cancer center that provides critical care to patients nearly reached a breaking point.

In the weeks after the breach, the center collected only around 40% of its normal payments, forcing its CEO, Kathy Oubre to apply for emergency Medicare relief.

She warned that if the situation in her cancer center dragged on, it would have to turn patients away or ask its owners to personally guarantee loans.

Circling back, even though Change Healthcare ended up paying the ransom, stolen data such as identification, social security numbers, insurance records, payment details, and other sensitive information taken during the cyberattack has yet to be recovered.

There’s Too Few Digital Gatekeepers in Today’s Tech-Driven World

Ultimately, the cyberattack Change Health fell victim to exposed a vulnerability not only in the American healthcare system but also in today’s increasingly tech-driven world.

Nowadays, a single compromised login can grind industries and critical digital infrastructure to a disastrous halt.

Preparation is no longer optional.

Cybersecurity breaches aren’t just about hackers, a few lines of malicious code, or compromised credentials; these are about human beings and the consequences they face when the systems they rely on suddenly collapse or become inaccessible.

Unfortunately, plugging cybersecurity vulnerabilities is getting tricker by the day due to AI.

Cybercriminals employ this tech each day to automate malicious attacks, write intricate malware, and orchestrate cyber attacks that adapt in real time.

Simply said, AI is no longer just a piece of tech that’s used to power innovations and bring enormous benefits to society. Bad actors are also employing it to achieve nefarious goals.

The cybersecurity world has long been in a fast-paced arms race. AI has just turbocharged that.

That’s why companies that help keep data safe and build strong digital walls will be the ones to come out on top.

As an investor, that’s an area of the market you should watch out for.

Hope you’ve found this week’s insights interesting and helpful.

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Stay tuned for next Wednesday’s The Independent Investor!

Let’s open this article with some real talk: Not everything that scales up gets better.

Learn more about why venture capital (VC) has lost its magic in next week’s article!