CHICAGO (Reuters) - A coalition of more than 50 healthcare companies and technology vendors on Monday unveiled a common security framework designed to be a benchmark for safeguarding the privacy of electronic medical records.

The Obama administration is encouraging broader use of electronic records in the United States with the aim of reducing medical errors, eliminating redundant testing and saving money overall.

But patient privacy concerns, a rise in security breaches in information technology and a lack of widely accepted security standards have been stumbling blocks.

"We have many challenges we face as an industry. One of the most significant is security in healthcare IT," said John Figueroa, president of U.S. pharmaceutical distribution for McKesson Corp, at a press briefing that was webcast.

McKesson is participating in the industry-led coalition, known as the Health Information Trust Alliance, which also includes health providers, insurers, pharmacies, biotech firms and device manufacturers.

The coalition's plan creates guidelines for

addressing the security and regulatory aspects of establishing a broad network for the exchange of electronic health records.

"Our focus is to increase trust in how health information is managed. We want to lower costs, reduce risks, increase efficiency and decrease complexity," said Dan Nutkis, chief executive of the alliance, also called Hitrust.

Members of the group include Cisco Systems, CVS Caremark Corp, Humana Inc, Johnson & Johnson, UnitedHealth Group Inc and hospital chain HCA Inc.

Among its applications, the common security framework is expected to help doctors and hospitals share patient records both on site and remotely, allow health plans to exchange patient data with doctors and protect online access to medical records.

The $787 billion U.S. economic stimulus law signed by President Barack Obama last month included $19 billion to promote adoption of health information technology such as electronic medical records and electronic prescriptions through Medicare and Medicaid incentives to doctors.

(Reporting by Susan Kelly; editing by Richard Chang)