HIPAAMistakesQuietly Killing Health Tech Deals With Hospitals
TL;DR
Health tech vendors don’t lose hospital deals because their product is weak. They lose them because their HIPAA posture isn’t credible at scale.
Hospitals no longer accept “we’re HIPAA compliant” as an answer. They want proof, process, and maturity. Breaches like Mixpanel and TriZetto aren't making it any better.
This article breaks down the seven HIPAA mistakes that quietly block deals, slow procurement, and raise red flags during hospital security reviews; and how to fix them before you sell.
For a clearer path forward, download the Strategic Guide for Health Tech Leaders. It breaks down how hospital buyers evaluate HIPAA readiness, security maturity and more!
Mistake 1: Treating HIPAA as a One-Time Project
Many vendors approach HIPAA like a launch task.
Policies written.
Let's check these other boxes.... done!
Hospitals see right through this.
HIPAA is an ONGOING risk management strategy, not a milestone.
Your product changes.
The infrastructure evolves.
Your vendor numbers grow.
And your risks change with it.
What hospitals expect
Evidence of recurring risk assessments
Policies that match your operations and not just templates.
Proof HIPAA treated as part of the business vs. a regulatory hurdle.
Do this: Run HIPAA risk assessments whenever your environment changes (hint: AI add-ons) and gap assessments annually.
Mistake 2: Assuming SOC 2 Covers HIPAA
SOC 2 helps.
It does not replace HIPAA.
Hospitals know the difference.
SOC 2 focuses on trust principles.
HIPAA focuses on PHI protection, privacy, anonymization, and regulatory accountability.
Hospitals look for this:
HIPAA Administrative, Technical, and Physical safeguards
PHI data-flow documentation
HIPAA aligned breach response timelines
Do this: Map SOC 2 controls to HIPAA requirements and document the gaps explicitly. I use a framework to make it more efficient for my clients. Frameworks is language hospital security teams love and speak fluently.
Mistake 3: Not Knowing Exactly Where PHI Lives and Moves
If you can’t clearly explain:
How PHI is collected
How it’s stored
How it's de-identified
Who can access it
How long its stored
You have some work to do.
Hospitals expect clear, defensible data-flow diagrams, not outdated and unclear ones.
Do this: Map PHI end-to-end across your applications, integrations, analytics tools, vendors logs, and support workflows.
Mistake 4: Missing or Business Associate Agreements
If a vendor touches PHI on your behalf, you need a BAA, period..
This includes cloud providers, support tools, analytics platforms, data processors, and subcontractors.
Hospitals will ask for assurance, not explanations.
Do this: Maintain a BAA inventory tied directly to your vendor list, review it annually, and dig deeper. Don't rely on their word, rely on evidence.
Mistake 5: Ignoring Tracking Technologies and Marketing Tools
Tracking pixels, form analytics, CRMs, etc. can easily cross into PHI territory.
Intent doesn’t matter...
Data exposure does.
Do this: Audit tracking technologies, minimize data collection, and validate configurations and agreements. OpenAI and PornHub suffered breaches to mutual vendor Mixpanel last week. This is yet another signal that vendors remain at the top of the list for organizational breaches.
🟥 FYI, Vendors accounted for 42% of breaches in healthcare in 2024. The highest across all industries.
Mistake 6: Weak Incident Response Beyond IT
Many vendors have an incident response plan that lives solely with IT.
Hospitals expect more and patients deserve more.
HIPAA incidents involve legal, security, leadership, PR, and vendors...not just engineers.
Do this: Build and test an incident response plan that includes vendor breaches, how and when you communicate to hospitals, and how decisions will be made.
Mistake 7: Treating HIPAA as Compliance Instead of Trust
Hospitals don’t buy compliance.
They buy confidence.
Your HIPAA program signals you know how to react when somethings wrong.
Do this: Turn HIPAA into part of your GTM strategy. Bring it up in sales pitches and pilots. And lastly train your sales teams to speak confidently enough about security that the hospital wants to adopt.
For a clearer path forward, download the Strategic Guide for Health Tech Leaders. It breaks down how hospital buyers evaluate HIPAA readiness, security maturity and more!
What Health Tech Vendors Should Do Next
Before your next hospital deal, be able to confidently answer:
Can we show a current HIPAA risk assessment?
Do we know every vendor touching PHI?
Can we explain our data flows clearly?
Are our BAAs complete and current?
Have we tested incident response beyond IT?
Hospitals don’t expect perfection from growth-stage health tech vendors.
They expect discipline, transparency, and maturity.
Let’s Talk Health Tech
Let’s make this a real conversation.
If you sell into hospitals, you’ve probably felt this already: deals slowing down, security questionnaires getting longer, and HIPAA becoming a gating factor.
P.S. Which part of HIPAA do you think health tech vendors underestimate the most when selling to hospitals? 👈
