We  would never have known that if not for the efforts of a small group of  specialists with a conscience writing on this issue over the past  decade; the industry long emphasized only the beneficence of the  technology.
In pushing for a new oversight  body, the respected Institute of Medicine, an independent research and  advisory organization, is explicitly advising that the Food and Drug  Administration (FDA) not be tasked with the job — a recommendation that  is bound to be controversial.  [Indeed - ed.]  The eagerly anticipated report,  titled “Health IT and Patient Safety: Building Safer Systems for Better  Care,” will be publicly released Thursday. A copy was obtained by iWatch News. The  study details nine other recommendations for how to ensure patient  safety when doctors and other health care providers use health  information technology, or health IT. The findings from the report were  presented October 28 to the Department of Health and Human Services  (HHS) and its agencies.
I do not consider the IOM's rationale for excluding the FDA to be reasonable...more below.
... the push [by the Administration] is occurring so far without any agency really ‘watch dogging’  the safety of health IT — the software, hardware and systems that record  and manage patients’ health information. These expensive devices by and  large have not gone through any regulatory checks for safety in the way  that food, drugs and other medical technology must; most of that  oversight is handled by the FDA. But at the moment, no one is required  to report instances of harm caused by health information devices and no  government agency currently monitors their safety.
This is a scandal of major proportions, considering the government has taken the approach "ready, shoot, aim" in putting in place penalties for non-adopters on a fantastically rushed timeline, via the HITECH Act within ARRA, while ignoring the risks.
“With all of  that money, marketing and public outreach, most simply affirm the value  of health IT as an article of faith, rather than investigate it via  careful evaluation,” said Ross Koppel, adjunct professor of sociology at  the University of Pennsylvania and its School of Medicine, and  investigator for RAND Corporation. He is listed as one of the reviewers  of the report.
"Faith" (e.g., irrational exuberance) in a technology has no place in science or medicine.
Addendum:  from the report itself:
... While some studies suggest improvements in patient safety can be  made, others have found no effect. Instances of health IT–associated  harm have been reported. However, little published evidence could be  found quantifying the magnitude of the risk. 
Several reasons health IT–related safety data are lacking include the absence of measures and a central repository (or linkages  among decentralized repositories) to collect, analyze, and act on   information related to safety of this technology. Another impediment to   gathering safety data is contractual barriers (e.g., nondisclosure, confidentiality clauses)  that can prevent users from sharing information about health  IT–related  adverse events. These barriers limit users’ abilities to  share  knowledge of risk-prone user interfaces, for instance through   screenshots and descriptions of potentially unsafe processes. In   addition, some vendors include language in their sales contracts and   escape responsibility for errors or defects in their software (i.e., “hold harmless clauses”). The committee believes these types of contractual restrictions limit   transparency, which significantly contributes to the gaps in knowledge   of health IT–related patient safety risks. These barriers to  generating  evidence pose unacceptable risks to safety. 
[IOM (Institute of Medicine). 2012. Health IT and Patient Safety: Building Safer Systems for Better Care (PDF).  Washington, DC: The National Academies Press, pg. S-2.]
Also in the IOM report:
…  “For example, the number of patients who receive the correct medication  in hospitals increases when these hospitals implement well-planned,  robust computerized prescribing mechanisms and use barcoding systems.  But even in these instances, the ability to generalize the results across the health care system may be limited.  For other products— including electronic health records, which are  being employed with more and more frequency— some studies find  improvements in patient safety, while other studies find no effect.
More worrisome, some case reports suggest that poorly designed health IT can create new hazards in the already complex delivery of care. Although the magnitude of the risk associated with health IT is not known,  some examples illustrate the concerns. Dosing errors, failure to detect  life-threatening illnesses, and delaying treatment due to poor  human–computer interactions or loss of data have led to serious injury  and death.”
In other words, nobody has any real idea of the magnitude of harms, which also implies 
nobody knows if the magnitude of harms exceeds the magnitude of benefits.  National rollout under these conditions is a 
horribly unethical situation on first principles.Though a variety of studies have concluded that the  use of health IT may improve patient safety, mistakes made in the  systems or difficulty using the technology can lead to serious injury or  death, according to the report.  
Other studies actually show little or no benefit or cost savings.  See 
this reading list for examples.  So, it has been article of faith that the technology in its present form is of benefit, and is not a risk.
An allergy might be omitted from a  computer record, for example, or an incorrect medication dosage might be  recorded. In Rhode Island, a Lifespan computer glitch  caused about 2,000 patients to receive the wrong types of medications. In another instance   in March 2009, an unattended patient suffered multiple seizures for  hours after a computer failed to alert doctors the patient was moved  from the intensive care into their ward.
And people die needlessly (a few examples are at 
link, 
link, 
link).
As reports of patient  harm began to emerge, the federal Office of the National Coordinator  (ONC) for health IT asked the Institute of Medicine (IOM) a year ago to  establish a Committee on Patient Safety and Health Information  Technology to make recommendations to the government about how to  maximize health IT safety.
I would rephrase that to:  as reports on patient harm were no longer able to be
 suppressed by the industry...
In its report, the IOM committee says  the FDA would likely restrict market innovation in health IT, which  could also jeopardize patient safety.
There has been little to no real "innovation" in health IT in well over a decade; if anything, the usability and quality has deteriorated.  Further, there is no data supporting the contention that FDA regulation of IT harms innovation.  Pharma IT (regulated) is far more innovative than the IT in healthcare delivery (unregulated).
Stringent regulations “can  negatively impact the development of new technology by limiting  implementation choices and restricting manufacturers’ flexibility to  address complex issues,” the report says. 
Bull.  It will keep the companies honest and "encourage" them to adhere to good software engineering and usability principles (unlike 
here), which will save lives.  It's unfortunate such "encouragement" is needed, I note.
The FDA currently receives voluntary reports  of health IT-related incidents, but has no resources or protocols through which to take action; the agency has long fought a losing battle  with health IT vendors over trying to monitor the technology.  The  report also notes the agency does not have the investigative  capabilities, funding or manpower to regulate devices such as electronic  health records, personal health records or health information  exchanges.
Then
 give them the resources, not develop an entire new agency.  The FDA has the talent and experience.  
[Note:  I have no connections to FDA whatsoever - ed.]... To  adequately oversee health IT safety, the committee recommends that the  secretary of health and human services create and fund a new independent  watchdog agency, along the lines of the National Transportation Safety  Board. Like NTSB, the new agency would conduct investigations and make  recommendations for all stakeholders, including the secretary of the  health and human services, vendors and health care organizations.  Vendors of the technology would be required to report adverse events,  while reporting would be voluntary for clinicians.  Like NTSB, though,  the new agency would also have no enforcement power.  
That is to say, it will be toothless and ignored, leaving a cavalier industry that should have gotten its act together twenty years ago to continue on with its nihilistic ways.
The panel  also recommends that the HHS secretary publicly report on the progress  of health IT safety each year, beginning in 2012. If the secretary  determines at any time that adequate safety progress has not been made,  only then should the FDA take the regulatory lead and be given the  resources to do so, the report recommends, adding that the agency should  be developing a framework now to be prepared.
This makes little sense.   In fact, 
it's an extraordinary special accommodation to the health IT industry (or should I say lobby) 
relative to other healthcare medicine/device sectors, and is 
bizarre.  It continues health IT as a 
human subjects research experiment without informed consent and opt-out.
With catastrophe-inviting events like this one becoming more commonplace, just how many patients will have been maimed or died in the meantime while the HHS Secretary's 'determination of adequate safety progress' is being made?  (What, exactly, will be deemed 'adequate', I also ask?) Creating a new  independent agency would, of course, require resources; the current  budget for NTSB is set at $559 million over the 2010 to 2014 period. In  the current climate of fiscal restraint, convincing Congress to  appropriate that sort of cash for a new government body might be a tall  order.
I note that it's a waste of taxpayer money to create a new agency to maintain/increase health IT industry profits at the expense of patients - not a wise choice IMO.
... Republican Sen. Chuck Grassley   of Iowa, senior member of the Senate Finance Committee, said the new  report “adds more to the list of unresolved questions, including which  government agency, if any, should regulate health care information  technology.”  Grassley, who wrote   HHS and health IT vendors two years ago asking what was being done to  ensure the safety of the devices, said “the approach seemed to be, write  checks first, solve the problems later, instead of the other way  around.” 
Having spoken extensively with Sen. Grassley's staff on these issues, I agree - except for the "seemed to be" disclaimer.  Replace "seemed to be" with "was."
The Institute of Medicine committee does have one dissenter. Dr. Richard Cook   from the University of Chicago feels the FDA is indeed the proper  agency to oversee health IT safety. Cook writes that health IT is  considered a “Class III medical device,” that is to say, a device that  performs integral medical functions, which the FDA already has the  jurisdiction to regulate.
Dr. Cook is a co-author of the short 2005 paper 
"Hiding in plain sight: What Koppel et al. tell us about healthcare IT" which I consider seminal in understanding why health IT as it exists today is so poorly done.
In its  report, the IOM panel also recommended that another study be done to  quantify health IT-related deaths, serious injuries or unsafe conditions  so that the safety concerns can be properly addressed. “You can only  improve what you measure,” says the report.
As I wrote in Oct. 2010, that is 
putting the cart before the horse again.  We study these issues while a national rollout under threat of penalty is underway?  
That's simply crazy.Other  recommendations in the report: establishing and enforcing criteria for  the safety of electronic health records, funding a new Health IT Safety  Council to set standards for safety, and requiring all health IT vendors  to publicly register and list their products with the Office of the  National Coordinator.