A 2024 report found that a ransomware shutdown in healthcare could cost $1.9 million per day on average. While the average cost for healthcare providers to rebound from a ransomware incident dropped from $2.6 million in 2024 to just over $1 million in 2025, according to the “State of Ransomware in Healthcare 2025” report from Sophos, health systems still face severe consequences. Budget constraints prevent many from allocating sufficient funds to prevent such attacks, particularly as cybercriminals increasingly leverage AI to sharpen their tactics.
The damage extends far beyond ransom payments. Unlike other industries, hospitals cannot afford system shutdowns, as disruptions to electronic health records, imaging tools, and medical devices directly endanger patient care. Ambulances are rerouted, procedures canceled, and billing systems paralyzed. Research published in February 2026 in the American Economic Journal: Economic Policy revealed that ransomware incidents raise in-hospital mortality rates by up to 38%. A separate 2024 study from the University of California, San Diego, connected these attacks to an 81% increase in cardiac arrests at affected facilities.
Regulatory repercussions further compound the financial strain. Compromised patient data triggers mandatory breach notifications, credit monitoring expenses, fines, and legal proceedings. The ransom itself often represents only the initial cost, with weeks of operational downtime, infrastructure repairs, and long-term legal consequences following.
Why hospitals are cyberattack magnets
Healthcare systems remain prime targets due to their highly regulated nature and the sensitivity of protected health information (PHI). Attackers exploit the knowledge that hospitals will prioritize rapid system restoration, creating financial incentives for exploitation. This reality demands that security teams justify investments not in vague terms like “risk reduction,” but in measurable financial impacts.
The Factor Analysis of Information Risk (FAIR) framework addresses this need. Developed in 2021 by cybersecurity expert Jack Jones, then a CISO at Nationwide Insurance, FAIR quantifies cyber risk in financial terms. Jones now leads the FAIR Institute, which teaches organizations how to translate technical vulnerabilities into board-level discussions.
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The framework assigns dollar values to potential losses by analyzing attack frequency and financial impact. For healthcare, this means comparing risks such as ransomware shutdowns to third-party vendor breaches—not as abstract threats, but as specific financial exposures. “FAIR gives healthcare security teams a common unit for comparing risks that otherwise look completely unrelated, like a ransomware scenario versus a third-party vendor breach,” explains Liat Hayun, senior vice president of product management at cybersecurity firm Tenable. Without it, hospitals rely on subjective risk ratings that fail to persuade finance teams to allocate funds.
How FAIR turns risk into dollars
Bernadette Dunn, director of business operations and development at the FAIR Institute, describes how the model reframes risk discussions. “We communicate risk and the likelihood of a ransomware event happening, and if it happens, how much it’s going to cost the organization,” she explains. The approach shifts focus from reactive measures like patching to proactive budgeting, ensuring funds are allocated only when attack probabilities exceed an organization’s risk tolerance.
However, many healthcare systems lack the data required to populate FAIR models accurately. “Feed the model with data already obtained from asset and vulnerability management tools instead of relying on guesswork, and pull in finance and clinical operations early to validate the loss estimates,” Hayun advises. The result is a defensible metric linking security spending directly to financial impact—a concept boards can understand.
Cybercriminals are escalating their use of AI to automate and refine ransomware tactics, complicating defenses for healthcare systems. Bernadette Dunn characterizes the challenge as a “constant whack-a-mole scenario.” Attackers use AI to identify vulnerabilities faster, craft more convincing phishing messages, and adapt malware in real time. Security teams must balance reactive defenses with proactive strategies, such as continuous vulnerability scanning and AI-driven threat detection, to counter these evolving risks.