Data Breach Report Highlights Need for Cyber Policies

By Randal S. Milch, executive vice president, Public Policy, and General Counsel of Verizon - 04/24/13 06:37 AM ET

This week Verizon released the 2013 Data Breach Investigations Report, its sixth comprehensive annual report of the state of cybersecurity.  The DBIR adds important factual information to the increasingly public debate over the consumer privacy, national security and economic issues around cyber crime and how to prevent it. 

While the 2013 DBIR confirms that cyber crime remains a grave and growing threat to our security, it also provides important lessons about protecting data and about sound public policy which will enable a more robust fight against cyber criminals.

First, the facts.  In 2012, large-scale financial online crime and state-affiliated cyber espionage dominated the security landscape.  Cyber theft of intellectual property such as classified information, trade secrets and proprietary business data is a top threat to U.S. national and economic interests, yet these state-affiliated espionage campaigns were actually less common in 2012 than “hacking,” which accounted for 52% of all 2012 data breaches. 

Hactivists – who launch cyber attacks for ideological purposes or for the pure thrill of it – seek to paralyze communications systems through Distributed Denial of Service (DDoS) attacks.  DDoS creates significant costs because they not only impair business and operations, they can slow block or dramatically limit access to websites under attack.

As in years past, the 2013 DBIR reaffirms the importance of cyber hygiene.  Seventy-six percent of network intrusions exploited weak or stolen user names or/passwords. Fully forty percent of intrusions incorporated such malware as malicious software, script, or code used to compromise information.  Rigorous password practices, controls on the use of transferable media like thumb drives and other basic protections remain the first, best protections against cyber attack. 

What do these facts say about public policy?  Two things:  cooperation and flexibility.  The vulnerability of hardware and software underscores the interdependent nature of the Internet ecosystem and the need for all technology sectors to be working closely together in defending against cyber-attacks.  Verizon has a strong record of protecting our networks and the privacy and data of our customers, and we share the industry’s commitment to ongoing efforts to further improve the effectiveness of our nation’s cyber defenses.  

While our industry successfully defeats millions of attempted cyber-attacks each day, it does so because it retains the flexibility to take quick and decisive action against these attacks. In February, the Obama Administration issued an Executive Order to promote best practices on cyber security for critical infrastructure sectors.  That Order acknowledged the need for a flexible approach driven by private-public collaboration. 

Changes in federal law would go further in advancing U.S. cybersecurity.  But it’s important to note that in addressing this increasingly important national and economic security issue, there is no single, correct solution. There are many players and many solutions, and all these players in the Internet ecosystem – service providers, communications equipment makers, software developers – need to participate in the common defense. 

Congress will also play a key role and can improve our national cybersecurity posture.  Perhaps the single most important step would be to promote the voluntary sharing of cyber threat information between and among communications companies and federal agencies.  Critical to ensuring private sector participation will be providing appropriate antitrust and liability protection.   And, of course, it is vitally important that legislation provides adequate protection for Americans’ privacy and civil liberties.  The recent overwhelming 288-127 House vote on the “Cyber Intelligence Sharing and Protection Act” clearly demonstrates that bipartisan, consensus-based cyber legislation is achievable this year.

As we continue to work to find the best solutions to ensure the best cyber security in the middle of this fast-moving technological war, we must avoid regulatory mandates that will quickly become obsolete and potentially hinder the ability of high tech companies and broadband providers to innovate and coordinate to defeat ever-evolving cyber threats.   These companies must maintain the flexibility to deploy new technologies in real-time to secure networks and to protect customers. 

Together, a strong public-private partnership will produce a safer and more secure online environment that supports America’s economic prosperity and growth.  As our data breach report recommends, there are many steps that businesses, government agencies and other organizations can take to protect themselves.   But it will take teamwork – all of us working together – to permanently secure one of the most creative – and important – inventions of our time that will only grow in importance for our future.

Randal S. Milch is executive vice president, Public Policy, and General Counsel of Verizon

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ObamaCare Highlights Top Hospitals — And Bars More

Surgeons insert a stent into a patient during heart surgery on Dec. 22, 2010, at Avera Heart Hospital, a physician-owned specialty hospital based in... View Enlarged Image

The Obama administration says it's identified hospitals that provide patients with the most value under a new ObamaCare bonus program. Unfortunately, the sweeping health law also makes it very hard for such facilities to expand or new ones to be built. Unfortunately, they turn out to be the very same facilities that the sweeping health care law tries to block from expanding.

ObamaCare has impeded the expansion of the hospitals that may provide patients with the most value according to the results of an ObamaCare bonus program.

The law's Hospital Value Based Purchasing program rewards hospitals that meet certain quality standards with a small percentage increase in their Medicare payments. Those that fall short face small Medicare payment percentage cuts.

The standards include "process measures," such as the percentage of patients receiving an antibiotic within an hour of surgery, and patient satisfaction measures, including how well a doctor communicates with a patient.

Nine of the top 10 hospitals in the first round of HVBP were physician-owned. Indeed, doctor-owned hospitals accounted for 48 of the 100 top spots, according to data from the Centers for Medicare and Medicaid Services. More than 3,400 hospitals were included in the program.

Treasure Valley Hospital got the top bonus, a 0.83% increase in its Medicare payments. The Boise, Idaho, physician-owned hospital offers an array of surgical services.

Most physician-owned hospitals tend to specialize in one field, such as cardiac or orthopedic surgery.

Physician-owned hospitals did so well because they "have more focus on patients and patient care. They put more money at the bedside," said Paul Kerens, president of Physician Hospitals of America. "Unlike major hospitals, we don't have as many bureaucratic layers to go through to get quality to the patient bedside."

Nancy Foster, vice-president for safety and patient quality at the American Hospital Association, said, "The measures are dominated by heart care and orthopedic care, which is where physician-owned hospitals are likely to excel. Additionally, hospitals that are new and smaller do better on the (patient satisfaction) measures and those differences make it more challenging for general, acute-care hospitals to score well."

While ObamaCare highlights and rewards physician-owned hospitals for their high patient value, the law also effectively bars any more from ever being built. Provisions withhold Medicare funds from any physician-owned hospital built after 2010.

That was a big victory for traditional hospitals, which claim their physician-owned rivals don't take as many low-paying Medicaid patients and thus are unfair competition. For years the AHA and the Federation of American Hospitals lobbied Congress to stop the expansion of physician-owned hospitals.

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The Kids Are Not All Right: Senate Hearing Highlights Children’s Mental Health Coverage Gaps

During a wide-ranging hearing on the status of America’s mental health system before a Senate health committee on Thursday, Sen. Al Franken (D-MN) Franken declared his intention to introduce the Mental Health In Schools Act to address issues of mental illnesses among America’s youth. Thursday’s event was the first Senate hearing on mental health care in six years, as the U.S. is currently engaged in a renewed national conversation on gun safety and mental health issues after last month’s tragic shooting at Sandy Hook Elementary School.

Franken explained that his legislation would “allow schools to collaborate with mental health providers, law enforcement, and other community-based organizations to provide expanded access to mental health care for their students” and “support schools in training staff and volunteers to spot warning signs in kids and to refer them to the appropriate services.”

While emphasizing that he didn’t want to inaccurately stigmatize most Americans with mental illnesses as being predisposed to violence, the senator questioned the director of the National Institute of Mental Health, Dr. Thomas Insel, about the correlation between untreated mental problems in American youth and subsequent violent behavior:

FRANKEN: If mental health issues go untreated, does that increase the chance that someone within a subset, a certain subset of a type of mental illness, will become more violent, Dr. Insel, or will be higher chance that they might become violent?

INSEL: So, Sen. Franken, within that narrow band of the people we’re talking about — which is a small, small segment of the population of people with a mental illness — but those, for instance, who have what we call ‘first episode psychosis’ — we know that the duration of untreated psychosis is related, in fact, to the risk for having a violent act. That’s been studied quite carefully and there’s a real correlation there, so closing that gap is one of the things we can do to increase safety.

FRANKEN: So since, in a sense since Newtown did prompt this, in that very narrow — and that was one of a number of horrific occurrences where I think that no one would question that in Tucson, in Newtown, that we’re talking about someone who’s deranged — that had that person been diagnosed, say, in school and had been able to get some kind of treatment, that there is some kind of connection between making sure that we’re identifying and treating children early on with the tragedy that brought us here?

INSEL: …The published data are quite clear. The difference between severely violent acts like homicide between those who are untreated and those who are treated is fifteen fold. So you drop the risk fifteen fold with treatment. So it’s vital – it’s absolutely vital – that we detect earlier and intervene earlier with something that’s effective.

While the public education system serves as American children’s primary resource for accessing mental health care, only one in five American children in need of treatment actually receives it. This is particularly problematic considering that half of all lifetime mental disorder cases set in by the age of 14.

But if the last several weeks are any indication, lawmakers seem to have woken up to the fact that the current trend is unsustainable. Franken’s proposal for expanding the public school system’s mental health safety net would work in conjunction with President Obama’s Project AWARE initiative to provide similar support and training to schools and other community-based organizations.

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