Business Headlines

Cyberattack on Medical Software Exposes Industry’s Vulnerability

(Bloomberg) —Many doctors still can’t use a transcription service made by Nuance Communications Inc. three weeks after the company was hit by a powerful, debilitating computer attack.

Hospital systems including Beth Israel Deaconess in Boston and the University of Pittsburgh Medical Center said eScription, a Nuance staple product that allows physicians to dictate notes from a telephone, still isn’t functioning. The outage obliterated doctors’ instructions to patients, forcing some to revert to pen and paper.

The computer virus, called Petya, has sent ripples through health care, among the last industries to make the switch to digital record keeping and one of the most frequently targeted by hackers, said Michael Ebert, a partner with KPMG who advises health and life-science companies on cybersecurity.

“Health care has been late to respond to the need for protected information, and the information is worth more,” Ebert said. “It’s amazing how far behind we are, and we know we have to do something.”

Hackers increasingly use viruses to encrypt companies’ information systems, unlocking the data only when a ransom is paid. After the Petya attack began in late June, companies from Oreo-maker Mondelez International Inc. to Reckitt Benckiser Group Plc warned of a blow to their sales. Information systems used by FedEx Corp.’s TNT unit may never fully recover, the shipping company said Monday.

Read more: FedEx’s TNT reels from June cyberattack

The University of Pittsburgh Medical Center, a system of 25 hospitals and 3,600 doctors, said that its dictation and transcription services are still affected “with no estimated time of resolution.” The nonprofit is using features of medical records systems made by Cerner Corp. and closely held Epic Systems in the interim, said Ed McCallister, the Pittsburgh system’s chief information officer.

When the hack hit in June, the virus spread quickly. Ebert said one of his clients stood in a parking lot with a bullhorn, pleading with employees not to turn on computers, lest the virus spread into them. Another saw 100 workstations infected in an hour. Others shut down their entire systems, painstakingly starting computers one by one offline to see whether they had been tainted.

After acknowledging June 28 that portions of its network were affected, Nuance, based in Burlington, Massachusetts, is still picking up the pieces. In addition to transcription, Nuance named about 10 other affected products, including those used for radiology, billing and software that tracks quality of care.

About half of the company’s $1.95 billion in revenue came from its health-care and dictation business last year. The malware attack represents a big risk for Nuance, as many of its customers use products that appear to have been affected, according to Bloomberg Intelligence analyst Mandeep Singh.

“Any time there is a cyberattack and a company is exposed to that threat, that presents both reputational risk as well as the risk from disruption,” he said. “Since a lot of the deals get signed toward the end of the quarter, the timing of it could have impacted certain deal closures.”

Enhancing Security

Nuance said it has been fixing affected systems, enhancing security and bringing customers back online. The company declined to say how many clients were affected by the attack.

“We are doing everything within our power to support our health-care customers and provide them with the information and resources they need to provide quality patient care, including offering an alternative system and solutions,” company spokesman Richard Mack said Wednesday in an email. “We have no indication that any customer information has been lost or removed from the network.”

Nuance rose 1.3 percent to $17.58 at 3:23 p.m. in New York. Shares have fallen 3.6 percent since June 27, when the attack began.

Other Products

The loss of service is an invitation to customers to seek other products and vendors, such MModal, a Nuance rival. Even though Intermountain Health Care, a Salt Lake City-based company that operates 22 hospitals, wasn’t affected, it turned off all its Nuance products and is using other transcription tools, said Daron Cowley, a spokesman.

At Beth Israel Deaconess, a Harvard-affiliated hospital, doctors who have been accustomed to using Nuance’s telephone-based product are switching to its Dragon system, where physicians dictate into a computer, making edits as they go.

That still means lost revenue for Nuance. While the computer-based product is a single software purchase, Nuance bills for eScription by line of text. So far, it’s been three weeks of revenue they can’t get back, and more users may drop away, said John Halamka, Beth Israel’s chief information officer.

“The hardest thing for a clinician is a change in workflow,” he said. “If you’ve changed for a couple of weeks, you might not go back.”

Nuance has done well to try to maintain customers in the aftermath of the attack, KPMG’s Ebert said, but the damage has already been done.

“They’re probably going to have a bad quarter,” he said.

 

–With assistance from Joshua Fineman.To contact the reporters on this story: John Lauerman in Boston at jlauerman@bloomberg.net ;Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net Mark Schoifet

The Author

James Riordan

James Riordan

Rare is it that any author will have one of his books described as the definitive work on a particular subject, but such a distinction has been bestowed by critics on no less than four books written by James Riordan. The New York Times Bestseller Break on Through, Riordan’s biography of Doors lead singer Jim Morrison, has not only been called “the most objective, thorough and professional Morrison biography” by the Times Book Review but also named as one of the Ten All Time Best Rock Biographies by Amazon.com. Riordan’s The Platinum Rainbow (written with Bob Monaco) was called “One of the best how-to books ever written” by the Los Angeles Daily News and “The ultimate career book on the music industry” by Recording, Engineer & Producer. Critics described Riordan’s The Bishop of Rwanda as “one of the most important books you’ll ever read.” and The Coming of the Walrus, Riordan’s novel about the 60s as “the definitive book on the era” and “a hilarious tale of a harrowing search for the greatest truth of all”. With the release of A Well Thought Out Scream and Madman in the Gate, Riordan pushed the boundaries again with poetry/song lyric books that contain hundreds of stunning, beautiful and poignant images from artists and photographers from all over the world. In the summer of 2013 a new edition of The Coming of the Walrus was released to rave reviews followed by The Kill Switch. The author of thirty-three books, James Riordan’s career began in the music industry where as a songwriter, manager, producer and concert promoter he worked with several well known artists. In 1976 he began writing a newspaper column, Rock-Pop, which he later syndicated. Riordan soon became one of America’s premier rock journalists with articles reaching millions of readers including those of Rolling Stone, Crawdaddy, Circus, Musician, and newspapers like The Chicago Daily News and The Kansas City Star. His reputation for relating on a one-to-one level soon led to interviews with George Harri-son, Bob Dylan, Fleetwood Mac, Frank Zappa, The Doobie Brothers, Kenny Rogers, Barbra Mandrell, Crosby, Stills & Nash and countless others. His first book, The Platinum Rainbow (written with Bob Monaco in 1980) became the largest selling book ever written about the music business. The guide to “succeeding in the music business without selling your soul” was praised by Variety ,The Chicago Tribune, The Los Angeles Times, The Las Vegas Sun, The Minneapolis Tribune, Billboard, Record World and many more. The Platinum Rainbow became an industry-wide phenomenon and interviews with James Riordan were aired on over 1200 radio stations and numerous television talk shows. Next Riordan collaborated with Pulitzer Prize winner Jason Miller on a mini-series for network television (The Irish) and a movie of the week for CBS (Bless Me Father). In June 1991, William Morrow & Co. published Break On Through to outstanding sales and reviews. Riordan worked as a consultant on Oliver Stone’s film of Morrison’s life, The Doors, which led to his writing Stone’s biography. Published by Hyperion /Disney in December 1995, Entertainment Weekly called STONE “an unflinching biography... enough spectacle to fill a month of daytime-TV talk shows.” The New York Post said reading the book was like “the sensory overload of watching all of Oliver Stone’s movies back to back.” Riordan was interviewed by Inside Edition, People Magazine, The Tom Snyder Show, and many others. From 1997-2000, Riordan created and co-starred in a local television program, Kankakee Valley Prime Time, which won six Crystal Communicators, three Tellys, and earned Riordan a Chicago/ Midwest Emmy Nomination for Writing the program. In the summer of 1999, James Riordan wrote, directed and starred in Maddance, an hour long dramatic project which won Crystal Communicators for Drama, Writing, Acting and Directing. On April 9, 2000, James’ 16 year old son, Jeremiah, was killed as a passenger in an accident that involved three drunk drivers. Shortly after this, James founded Make it Stick which works to warn teens of the dangers of substance abuse and publishes a magazine distributed to high school students. In 2001, he founded Jeremiah’s – A Place to be Yourself to give teens a place to hang out away from the dangers of drugs and alcohol. Force to close by its incredible growth rate, Jeremiah’s was recognized as one of the fastest growing and most successful teen centers in the United States. In 2004, Toastmasters International named Riordan Communicator of the Year for Central Illinois, the YMCA gave him their Service to Youth Award and the United Way named him the Outstanding Volunteer of Kankakee County. Returning to writing, Riordan went to Africa to write The Bishop of Rwanda, (with an intro by Purpose Driven Life author Rick Warren). In November of 2006, Harper Collins released a new edition of Break On Through followed by The Coming of the Walrus (Image Workshop) in December and The Bishop of Rwanda (Thomas Nelson, Inc.) to rave reviews (“Powerful …plumbs the depths of God’s forgiveness and finds no bottom – Publisher’s Weekly). In 2011, he won the Pledge For Life Harold Award for his work with area youth. In the summer of 2012, Lee and Shane Stanley (Gridiron Gang) optioned Maddance as a feature film followed by Apothecary Films optioning The Kill Switch in 2013 and Omni Films optioning Final Service to film in May. Riordan joined the staff of the Mancow Syndicated Television and Radio show in January of 2014 and is now seen and heard across America on a weekly basis. His biography is included in Who’s Who in Entertainment , Who’s Who in Poetry and Contemporary Authors of America. James Riordan – Works Books The Kill Switch, novel with Andrew Dahlmaine, Stonegate Ink, 2013 The Coming of the Walrus, Trade Paperback Editn, Image Workshop 2012 Springboard To Heaven ( Jojo Sayson Adventure), Image Workshop, 2012 The Elijah Collection, novel collection with Bill Myers, Zondervan, 2011 The Well Thought Out Scream (Poetry/Art), Image Workshop Press, 2009 Madman in the Gate (Poetry/Art), Image Workshop Press, 2009 The Deadly Loyalty Collection, Forbidden Doors, Zondervan, 2009 The Ancient Forces Collection, Forbidden Doors, Zondervan, 2009 The Enemy Strikes with Bill Myers (Elijah Project series. Zondervan, 2009 Deception with Bill Myers (Book 2 Elijah Project series. Zondervan, 2009 The Bishop of Rwanda (Finding Forgiveness) Thomas Nelson, March 2007 Paperback Edition May, 2012 The Coming of the Walrus (What Really Happened in the '60s) IW, 2006 Break on Through (The Life & Death of Jim Morrison), Morrow, 1991. (New York Times Bestseller, Published in 5 languages, Hardcover, 5 Paperback Editions, Harper Trade Paperback November, 2006) Stone (The Controversies, Excesses & Exploits of a Radical Filmmaker), Disney/Hyperion,1995. (Published in 3 languages, Hardcover, Paperback Edition). Making It in the New Music Business, Writers Digest Books, 1987, (Second Edition, Revised and Updated 1991, Two Hardcover Editions) The Platinum Rainbow (How to Succeed in the Music Business Without Selling Your Soul) 250,000 copies with Bob Monaco, Swordsman Press, 1980, Twenty-Three Editions, Revised 1988) 25 Year Anniversary Edition, 2005 Capture the Wind (Microphones) w.Tom Lubin, Literary Mouse Press,1989 Private Biography of Russ Kalvin, founder of Kalvin Corp., 1990 Private Biography of Steve Stefano, founder of Joico Hair Products, 1993. Mystery of the Invisible Knight (Book 2 in the BloodHounds Series) with Bill Myers, Bethany House,1997. Matters of the Heart (The Life & Times of Edgar Cullman), Culbro, 1997. The Curse (Book 7 Forbidden Doors) with Bill Myers, Tyndale, 1997. The Undead (Book 8 Forbidden Doors) with Bill Myers, Tyndale, 1996. The Scream (Book 9 Forbidden Doors) with Bill Myers, Tyndale, 1998 The Ancients (Book 10 Forbidden Doors) with Bill Myers, Tyndale, 1999. The Cards (Book 11 Forbidden Doors Series) with Bill Myers, Tyndale,2000 Films Final Service, co-written with Gary Moore and based on his book, Omni Productions, to be filmed in May, 2014. Maddance, Writer/Director/Lead Actor, Search Engine Films, Simmcomm, 1999. (Winner of 4 Crystal Communicators including Best Drama, Screenplay, Director, Male Actor – Austin, TX.1999) Performance (The Life of Ingrid Bergman), Screenplay, Lancit Productions 1998. Returned to Author when film division closed)Rewritten2009 Shadowdancers, Story & Screenplay, Story with Bill Myers, 1997 Dr. Babylon, Story 1996. Air Guitar, Story & Screenplay, 1994 The Platinum Rainbow, Story & Screenplay, 1993 Television/Video Kankakee Valley Prime Time, Writer, Director, Producer, 1997-2000. (Nominated for Midwest/Chicago Emmy for Writing, 1998, 3 Telly Awards, 4 Crystal Communicators 1998-2000). Angels Among Us (The Amtrak City of New Orleans Train Disaster, Co- Producer, (Telly Award, 2000). River Valley Sports Authority, Producer, 1999-2003. I Hate The World (Hypnoises Music Video), Writer/Director/Producer, Crystal Communicator for Best Music Video Concept, 1998). The United Way (Video) Crystal Communicator for Best Video for a Charitable Organization, 1998.

If it isn't money and it isn't fame and it isn't sex... then what... God?

— James Riordan, 2000

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