Medical research is expensive and inefficient. New drugs, for example, must undergo lengthy trials before getting FDA approval. But not all the problems emerge during these trials; the FDA has insufficient resources to retest drugs it has already approved, and is often unwilling to withdraw approval for drugs that are on the market on the basis of evidence that is often not collected in a controlled manner. This puts people at risk; fixing it by expanding the FDA's testing activities is expensive.
Electronic medical records offer a way of collecting information about drugs that would allow the FDA to see patterns in large sample studies (since the sample is the population). This will make drugs safer.
There are other benefits to electronic medical records. Not all research in medicine is done in carefully planned studies in teaching hospitals. Much, though it's hard to say how much, is done by general practitioners and specialists who read journals, have ideas, and try things out; for example, new combinations or dosage levels of drugs.
Collecting information about such 'in situ' clinical trials - in aggregate of course - provides additional research data for scientists seeking to better understand things such as the interaction of drugs and physiology, and the progress and virulence of diseases.
These are just some of the benefits that need to be weighed against the potential risks of sensitive personal medical data falling into the wrong hands. There are implications for the private insurance market, but that is another story.
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