Of course now that I read a bit more into it, I am less sure. But I do find the above link a little fear-mongery.
Incidentally, this document has some interesting insight into the position of the hscic. http://www.hscic.gov.uk/media/12931/Privacy-Impact-Assessmen.... I am a little tickled by this statement about preventing the data falling into the wrong hands: "The Government itself could be considered a pair of 'wrong hands' with questions raised over whether it would have access and therefore would be able to misuse or exploit the data".
Not sure how they're mitigating against that risk...