How Do Cybersecurity Breaches Affect Hospital Survival? Evidence from the U.S. Hospital Industry, 2008–2017

Abstract

Cybersecurity breaches in U.S. hospitals are becoming more frequent and severe, posing growing threats to hospital survival. Yet, empirical research on their long-term effects remains limited. Theoretical perspectives diverge: while breaches can disrupt operations and erode trust—heightening the risk of closure—they may also spur organizational learning and renewal, potentially enhancing survival. This study examines the impact of cybersecurity breaches on hospital survival using panel data from U.S. hospitals between 2008 and 2017. Contrary to common assumptions, we find that breaches are, on average, associated with improved hospital survival. However, this effect is strongly moderated by the hospital’s level of digitalization: low-digitization hospitals are more likely to survive after a breach, while highly digitalized ones face increased closure risk. These findings shed light on the complex interplay between digital maturity and cyber resilience, with important implications for both research and hospital management.