4. Treat Cybersecurity as a Core Business Risk
In digital health, cyber incidents are no longer hypothetical. Instead, they’re an imminent reality that disrupts care, triggers reporting obligations, erodes trust and creates litigation risk.
Digital health companies that recover fastest prepare in advance. Here are some of the core elements of their strategies:
- A coordinated incident response plan across legal, technical and communications teams
- Preselected outside counsel and forensic partners
- Clear escalation paths and decision authority
- Regular tabletop exercises
- Vendor response obligations in contracts
- Defined cyber liability coverage
Planning should assume regulatory scrutiny and litigation from the outset. Speed and coordination in the first three days are critical.
5. Contract for Reality
Contracts should reflect how a digital health company operates rather than relying on generic templates. Boilerplate agreements often fail to capture actual data practices.
Instead, here’s what contracts should clearly address:
- Data ownership and permitted uses, including AI training
- Security standards and audit rights
- Incident response roles
- Regulatory compliance allocation
- Liability and indemnification tied to real risk
Although reducing legal exposure is the primary goal, when done correctly, well-structured contracts also make it easier to build partnerships and move through due diligence more efficiently.
READ MORE: What to know about the growing role of AI agents in healthcare.
6. Prepare for Diligence Early
In digital health, diligence from payors, health systems, investors or acquirers is inevitable. Deals move faster when governance and compliance are already organized.
Therefore, here’s a brief sample of what companies should maintain:
- Current data maps and vendor inventories
- Documented AI governance principles
- Privacy and security policies aligned with operations
- Security assessments
- Incident response testing records
- Clear internal ownership of compliance
This level of organization demonstrates maturity, reduces deal friction and builds confidence under pressure.
Organizational and Shared Responsibilities To Move Forward
AI, privacy and cybersecurity are no longer background legal issues. In digital health, they are core to growth, valuation and trust. The companies that succeed are not those that eliminate risk, but those that understand it, manage it and communicate it clearly. When treated as strategic assets rather than obstacles, these disciplines do not slow innovation, they enable it.
