Honestly, I don't know what terrifies me more about such businesses: storing my personal information on pieces of paper with no way to track their movement, or storing my personal information on (what is most likely) unsecured computers. They are both pretty horrific, but I think I prefer them to store it on paper if they can't/won't afford to have secure computers.
I can't count how often I've seen doctors offices use Windows 2K or XP Home Edition this year alone. Even saw a doctor use a computer after closing down "does your computer have viruses" IE popups -- and then proceeding to enter my private info into their (probably HIPAA-certified, which, at that point meant squat) patient tracking application.
Just saying that paper is not always necessarily worse than electronic records.