That is extremely poor advice.
As I already said, I understand that the healthcare professionals are bound by laws. Those are in place for good reasons, as are the rules about colleges not giving out their grades to parents (however when I was in college mom said "You ARE showing me your grades, or I'm not helping pay for it anymore" - a fair trade).
When you're talking about people who are not legally bound, this gets a lot more complicated. Sure, for a fully functioning, independent adult, respecting the privacy is important. I will agree there and say there are few places where it shouldn't be respected.
When you're talking about someone who's in or approaching the geriatric phase of life (or someone who has underlying medical, specifically mental issues) this is where you need to really think about whether you know the whole picture, and the answer is you probably don't.
I'm not going to go into details about some of my mom's underlying issues, but I am also certain that her friends don't know about most of the more concerning ones that aren't public knowledge. People may be legally living independently and legally allowed to make their own decisions still, but there's a spectrum and at that point in life many (if not most) people are starting to slide further towards the "fewer decisions" category. We ran into this with my grandmother too.
If the next of kin are known to be untrustworthy for some reason (known financial troubles, known money grubbers, criminal status, illicit drug use, or other underlying issues) then yes, you probably don't want to tell them. However those situations are pretty rare.