Journal of Medical Internet Research - International Scientific Journal for Medical Research, Information and Communication on the Internet #Preprint #PeerReviewMe: Warning: This is a unreviewed preprint. Readers are warned that the document has not been peer-reviewed by expert/patient reviewers or an academic editor, may contain misleading claims, and is likely to undergo changes before final publication, if accepted, or may have been rejected/withdrawn. Readers with interest and expertise are encouraged to sign up as peer-reviewer, if the paper is within an open peer-review period. Please cite this preprint only for review purposes or for grant applications and CVs (if you are the author). Background: Cybersecurity incidents are a growing threat to the healthcare industry in general and hospitals in particular. The healthcare industry has lagged behind other industries in protecting its main stakeholder (i.e., patients), and now hospitals must invest considerable capital and effort in protecting their systems. However, this is easier said than done, because hospitals are extraordinarily technology-saturated, complex organizations with high endpoint complexity, internal politics, and regulatory pressures. Objective: The purpose of this study was to develop a systematic and organizational perspective for studying: 1) the dynamics of cybersecurity capability development at hospitals; and 2) how these internal organizational dynamics interact to form a system of hospital cybersecurity in the U.S. Methods: We conducted interviews with hospital CIOs, CISOs, and healthcare cybersecurity experts, analyzed the interview data, and developed a system dynamics model that unravels the mechanisms by which hospitals build cybersecurity capabilities. We then use simulation analysis to examine how changes to variables within the model affect the likelihood of cyber-attacks across both individual hospitals and a system of hospitals. Results: We discuss several key mechanisms that hospitals use to reduce the likelihood of cyber-criminal activity. The variable which most influences the risk of cyber-attack in a hospital is endpoint complexity, followed by internal stakeholder alignment. While resource availability is important in fueling efforts to close cybersecurity capability gaps, low levels of resources could be compensated for by setting a high target level of cybersecurity. Conclusions: In order to enhance cybersecurity capabilities at hospitals, the main focus of CIOs and CISOs should be on reducing endpoint complexity and improving internal stakeholder alignment. These strategies can solve cybersecurity problems more effectively than blindly pursuing more resources. On a macro-level, the cyber vulnerability of a country’s hospital infrastructure is affected by the vulnerabilities of all individual hospitals. In this large system, reducing variation in resource availability makes the whole system less vulnerable—a few hospitals with low resources for cybersecurity threaten the entire infrastructure of healthcare. In other words, hospitals need to move forward together in order to make the industry less attractive to cyber-criminals. Moreover, while compliance is essential, it does not equal security. Hospitals should set their target level of cybersecurity beyond the requirements of current regulations and policies. As of today, policies mostly address data privacy, not data security. Thus, policymakers need to introduce policies that not only raise the target level of cybersecurity capabilities, but also reduce the variability in resource availability across the entire healthcare system.