Digitisation is on the rise showing no signs of slowing down particularly in the healthcare sector.
Reliance on third-party vendors is becoming the norm for services ranging from medical equipment to software platforms to patient data management. This digital transformation though beneficial, exposes healthcare providers to significant third-party risks.
In 2023 alone, 60% of healthcare data breaches were caused by third-party vendors, costing organisations an average of $10 million per incident. In fact, healthcare was the industry most affected by third-party breaches in 2024, accounting for 41.2% of all third-party breaches.
Thus, this article explores:
Third-party risk management in healthcare refers to the structured process of identifying, evaluating, mitigating, managing and tracking the risks associated with any external entities (vendors, suppliers, contractors, or business associates) that offer services, or handle sensitive information (Protected Health Information-PHI) for a healthcare organisation.
It’s about managing the possible negative effects that these external relationships could have on a healthcare provider’s data security and privacy, operational integrity, financial stability, regulatory compliance, reputation, and patient safety.
Despite the multi-faceted nature of third-party risks, which include cybersecurity, operational and financial vulnerabilities, this excerpt focuses only on 3 key risks.
1. Regulatory and Compliance Risks
Regulatory third-party risk in healthcare arises when vendors fail to comply with local or international laws, exposing organisations to fines, legal action, operational disruption, and reputational damage. Compliance typically involves data protection, healthcare standards, and anti-fraud requirements, guided by frameworks such as HIPAA (Health Insurance Portability and Accountability Act) and the GDPR (General Data Protection Regulation).
In the MEA region, this risk is intensified by evolving legislation, inconsistent data protection laws, and restrictions on cross-border data transfers. Countries such as the UAE, Saudi Arabia, and South Africa enforce regulations with extra-territorial scope, requiring international vendors handling local data to meet national legal obligations. At the same time, strict localisation rules, particularly in the UAE, often prevent data from being transferred abroad without prior approval, complicating operations for organisations using global vendors.
Managing these obligations, along with sector-specific rules and anti-bribery laws such as the FCPA and UK Bribery Act, adds significant cost and complexity to third-party risk management across MEA healthcare.
These risks relate to disruptions in the flow of medical supplies, pharmaceuticals, or equipment from external vendors. They often stem from delays, shortages, or quality issues driven by supplier insolvency, regulatory changes, over-reliance on a single supplier, or political and economic instability.
In the MEA region, healthcare supply chains are particularly vulnerable due to infrastructure gaps and heavy reliance on imports. Weak transport networks, port congestion, and economic volatility increase the likelihood of stockouts and service disruptions.
Recent cases highlight the urgency: Lebanon’s $400 million debt crisis led to widespread medicine shortages; a Saudi manufacturer incurred $25 million in losses due to a faulty API from a sole supplier; and Egypt’s Decree 39 delayed imports through strict shelf-life enforcement. While the UAE’s blockchain initiatives have improved traceability, past weaknesses in counterfeit detection persist. These challenges highlight the need for robust third-party risk management focused on localisation, continuity, and strengthened vendor oversight.
3. Reputational Risks
Reputational risk in third-party risk management involves damage to an organisation’s image and stakeholder trust due to third parties. In healthcare, where credibility is paramount, vendor incidents such as data breaches, non-compliance, service failures, or unethical behaviour can cause severe, long-term harm.
Healthcare entities are frequently held responsible for third-party failures, resulting in patient attrition, staffing challenges, regulatory scrutiny, and adverse media coverage. Consistent poor vendor performance also erodes trust over time.
Within the MEA region, where trust and community perception are highly valued, such incidents are often viewed as violations of societal norms, with consequences amplified by social media and local networks. Consequently, thorough due diligence and robust monitoring are indispensable.
In 2025, third-party breaches severely impacted the MEA healthcare sector.
A ransomware attack on Dubai's NHS Moorfields Hospital, carried out through an IT provider, compromised patient data and attracted scrutiny. That same year, a breach in Lebanon exposed over a decade of patient records from four hospitals: Bellevue Medical Center, Nini Hospital, Notre Dame University Hospital, and Haykel Hospital.
Similar incidents surged across Saudi Arabia and the UAE, disrupting healthcare services through attacks on external vendors. Meanwhile, third-party supply chain vulnerabilities became evident during the 2024–2025 mpox outbreak. Medical supply delays in the Democratic Republic of Congo hindered outbreak response, exposing a critical weakness in regional health infrastructure.
Managing third-party risk in healthcare requires deliberate, regionally informed action across governance, execution, and culture. Th
Key strategies for effective TPRM can be summed up as follows:
1. Establish Strong Governance and Align with Regional Realities
Start with a formal TPRM framework based on internationally recognised standards such as ISO 27001, NIST, or VRMMM. Clearly define risk appetite and tolerance to support consistent vendor decisions. Assign responsibilities across key functions including Risk, IT, Legal, Procurement, and Clinical teams. Secure executive sponsorship and ensure visibility through board-level reporting.
Adopt a centralised or hybrid governance model that balances consistency with adaptability to MEA-specific legal and regulatory conditions. Embed local compliance expertise to address requirements such as data localisation and cross-border data flow restrictions. Use federated or hybrid data architectures to remain compliant with MEA data residency laws.
2. Operationalise the TPRM Lifecycle with Risk-Based Execution
Create a centralised vendor inventory and classify vendors by inherent risk, considering data sensitivity, service criticality, and geographical location. Tailor due diligence to risk tier, using documentation review, technical assessments and local intelligence sources like OSINT and HUMINT.
Screen vendors for sanctions, political connections, financial instability and reputational risk.
Draft contracts that comply with MEA laws and include service-level agreements, breach notifications, audit rights and business continuity terms. Incorporate anti-bribery, ESG and healthcare regulations. Continuously monitor vendor performance through KPIs, scheduled reassessments and event-based triggers. Use automation and integrate your TPRM system with IT service management, and procurement platforms.
3. Build a Risk-Aware Culture and Organisational Resilience
Deliver regular training on third-party risk policies, tailored to local languages and cultural contexts to ensure engagement across diverse teams. Clarify responsibilities across the organisation and foster a culture of shared ownership for vendor-related risk. Equip leadership with real-time dashboards and automated reporting to support informed decision-making.
Enhance resilience by diversifying your vendor base and reducing reliance on high-risk regions. Ensure vendor continuity plans align with your organisation’s recovery time objectives (RTOs). Continuously evolve the TPRM programme using insights from audits, reassessments, and changes in the regulatory environment.
Cedar Rose offers healthcare providers in the region robust third-party risk management.
Our CRiS Intelligence platform strengthens onboarding and compliance by uncovering UBOs, complex ownership structures, and hidden supply chain links. We deliver actionable due diligence insights through UBO tracing, OSINT, and network analysis, along with political exposure screening, sanctions checks, and HUMINT investigations for deeper leadership risk visibility.
With real-time compliance screening, AML frameworks, and continuous media and regulatory monitoring, we help detect high-risk entities and prevent financial crime.
Backed by 25+ years of global experience and unmatched regional expertise, Cedar Rose delivers scalable, GDPR-compliant solutions tailored to MEA healthcare risk.
Contact us to learn more.