That's a good insight. Never dealt with any medical stuff, but I dealt with paperwork in the military as it was going through a (long painful) transition to electronic documents back in the '00s.
And I don't think it's just that society is litigous, but that databases actually (mostly?) work in terms of enforcing the rules you give them.
One anecdote of how things changed was that you used to be able to arrive on post, and if you didn't like your orders, talk to a sergeant major of another unit and quietly get your orders changed, which no doubt drove PERSCOM crazy.
When things were done with paper, there was a certain degree of flexibility in the rules that gave people some amount of local autonomy. When those rules are enforced by a computer, there's much less possibility of someone being able to override the rules when it makes sense.
Normal human social interaction tends to create unwritten rules that are simply more flexible and realistic than the rules we're willing or able to write down.