Becker Private Equity & Business Podcast
Cybersecurity in Healthcare Private Equity: Insights from Clearwater’s John Santana 5-13-25
Tue, 13 May 2025
In this episode, John Santana, Principal Consultant at Clearwater Security, joins Scott Becker to discuss the evolving cybersecurity landscape in healthcare private equity. He shares best practices for due diligence, post-acquisition risk management, and key takeaways from Clearwater’s groundbreaking Cyber Risk Benchmark Trend Report.
Chapter 1: What are the key cybersecurity challenges in healthcare private equity?
This is Scott Becker with the Becker Private Equity and Business Podcast. Thrilled this past week to pass 7 million downloads and to get to the spot we're ranked for the last couple of weeks, the very top of the Apple Business News chart rankings. We're excited today to be joined by John Santana.
John is a principal consultant at Clearwater Security, and he focuses on private equity firms assessing their cybersecurity risks across their portfolio of healthcare investments. He's also served as lead author on the Cyber Risk Benchmark Trend Report on Healthcare PE that Clearwater recently published. John, can I ask you to take a moment to tell us a bit about yourself and about Clearwater?
Yeah. Thanks for having me on, Scott. And congratulations on those impressive metrics. You got me all nervous now. I'm on the Joe Rogan of business podcasts.
No, no, no, no. You're fantastic and no reason to be nervous. And God bless you. Tell us a little about yourself and Clearwater Security.
Yeah, so I've been at Clearwater going on four years now. I'm a principal consultant there, and I lead our private equity services delivery in our digital health, health IT team. And Clearwater is the largest pure play healthcare cybersecurity compliance firm tailored just to serving the healthcare industry.
I mean, we have targeted teams and verticals serving integrated delivery networks, digital health, health IT companies, and physician practice management groups. And yeah, we also work directly with law firms and private equity firms specializing in health care. You know, our genesis, we really started off more in the risk advisory compliance space as HIPAA wizards, if you will.
And we've really evolved in the last five years, especially into a full blown man security services provider business. I've been along for that ride and that transformation, and it's been really fantastic watching the firm evolve and growing with it personally. So, yeah, it's been a great run.
John, we've had a chance to watch Clearwater grow over the years. It's impressive what you folks have done. When you look at private equity firms that invest in healthcare, they acquire healthcare organizations. What kind of unique cybersecurity challenges do they face? And how do these risks differ than some of those in other industries?
Absolutely. Well, I mean, the short answer is the highly nuanced regulatory complexities, right? I mean, some of these portfolios will have a pharma startup, a contract research organization, a revenue cycle management company, and then a big old DSO with 500, 900 locations. And every Totally unique business cases, totally unique challenges, and totally unique regulatory requirements.
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Chapter 2: Who is John Santana and what is Clearwater Security?
So developing what those minimum standards are and looking to enforce that across the board. And then from there, right, developing that portfolio level monitoring. So in our case, right, we use a common assessment framework. We're big fans of 405D over here.
assessing each portfolio company to get a handle on the relative maturity of each organization, and then really going deeper than that and developing tailored recommendations, that tailored roadmap to better improve the cybersecurity maturity commensurate with each unique organization.
Thank you. And take a second. For private equity funds that have lots of different investments in the healthcare portfolio, centralized approach to cybersecurity, decentralized. What's the common prevailing wisdom and what advice do you have on that and how much people take a centralized approach versus the decentralized approach?
Yeah, this is a fun one, right? No two firms are the same as far as how centralized or decentralized they are. I mean, a lot of it does come down to personal preference. And I've seen Both work out pretty well, but some things that I would encourage would be collaboration and resource sharing, where it makes sense, between the Portco security leadership.
So we see this all the time where all the CEOs get together and all the CFOs get together. Well, do the same thing with the CISOs and the security managers and your security leadership across the portfolio. Chances are they're dealing with at least one or many of the same compliance and technical pain points, right? Maybe one portfolio company just upgraded all of their Microsoft licensing.
Another one still needs to do that, and they can help do some resource sharing there. Maybe one portfolio company is really emblematic of a specific best practice, right? Maybe one just has their DLP program, the Data Protection Loss Prevention Program, just absolutely nailed, and they have full enterprise DLP. Well, share those best practices with the rest of the class, right?
So I would encourage a semi-regular meeting of those security leaders where they can bounce ideas off one another and share in the glory, share in the pain, and ultimately win. work together. And there's other efficiencies that can be unlocked there too, Scott. So there's all kinds of potential cost savings that could be realized through vendor consolidation and vendor sharing.
I'm not saying put everybody on the same tenant, but perhaps looking at that bulk pricing on certain services or, you know, some of those things that I mentioned that everybody needs to do, right? There's some potential cost saving opportunities there by finding the right vendor.
So, you know, those are a couple elements, but another direction I take that to is, you know, PE firms should absolutely build out their own internal security capabilities to an extent, right? I mean, they're dealing with, a lot of personally identifiable information, right? They're not necessarily providers, but they are still dealing with a fair amount of sensitive information.
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