Innovative business models and new technologies, he said, has transformed a range of industries from retail to finance.

But Georgeff said health care is not thinking along innovative lines. Instead, there is a strong move toward centralized systems and control.

"There is a strong focus on standards and agreed terminologies, all of which can be positive, but not when used to constrain the development of open networks," he said.

The report identifies three steps to go forward: getting providers connected to one another; tracking health events across the continuum of care; creating a broadband network of health services such as services for chronic disease management.

"A number of hospitals provide electronic discharge summaries and most pathology results are now delivered electronically. But this should be universal, and should be extended to include referrals, orders, hospital admissions, results and follow-up actions across the entire spectrum of care," he said.

Georgeff believes privacy and security is not a barrier to e-health as solutions already exist to deal with these issues.

To ensure all systems can effectively communicate, the new format will be based on the HL7 family of standards.

NEHTA CEO, Dr Ian Reinecke, said this decision provides a clear national direction.

Further information about HL7 standards can be found at www.hl7.org.au.