The investment over two years in the national e-health records system is the big-ticket project in Treasurer Wayne Swan's third budget and aims to improve patient safety through better management of prescriptions, and to cut waste and duplication.
But industry analysts say IT infrastructure across the various jurisdictions of the health sector has been such a hairball for so long that implementation will be a significant challenge, and not enough was known about the targeted roll-out areas to gauge its potential for success.
And the Rudd Government's e-health plans still have to content with an expected campaign from privacy advocates who worry that the Individual Healthcare Identifiers - an ID number - on which the records management system will operate are not secure enough.
Further, there is no guarantee that the legislation required to implement the scheme - most notably the introduction of the IHI number - will get through the Parliament any time soon. Government had hoped to have the legislation in place by the middle of the year, but with a hostile Senate and growing obstructionism from the Opposition, this is no certainty.
Health Minister Nicola Roxon says e-health system will revolutionise the delivery of health services in Australia and was a key building block for the Government's health reform agenda.
Through the system, patients will for the first time have online access to information about their medical history - including medications, test results and allergies and medical history. It also lets the patient control which doctors and other healthcare providers access that information.
But while Ms Roxon has promised rigorous governance and oversight procedures to maintain privacy, the lobby group Electronic Frontiers Australia remains unconvinced and is mounting a campaign against the IHI - which it says it similar to the Howard Government Access Card proposal and Bob Hawke's Australia Card.
About 2-3 per cent of hospital admissions in Australia are linked medication errors, the Government says, which equates to 190,000 admissions each year and costs the health system $660 million. About 8 per cent of those medical errors are because of inadequate patient information.
Research group Ovum says the e-health announcement is welcome, and even surprising, given the size of the investment. But it says the sector needs more detail on the spending before it gives a round of applause.
"While the funding is clearly in the right direction, industry reaction is typified by confusion as to exactly what the system will achieve and how it will operate in practice," Ovum's Australian research director Steve Hodgkinson said.
And there are significant questions that need answering.
"$466.7 million seems either too little or too much, depending on the scope of the initiative," Hodgkinson said, "too little to actually create a national e-Health records system that is efficiently integrated into the hundreds of systems already operating within the sector."
"And too much to be prudently spent in such a short time frame - given the complexity of the situation, the legendary slow pace of government procurement and the Government's track record of implementing complex operational projects in a hurry."
Ovum believes the uncertainty about Government's long term goals - given the short two-year funding timetable of this initiative - will be a significant obstacle for the healthcare sector's commitment to investing the time and energy to trialling and supporting the system.
Global technology services provider CSC says the $466 million is a good "initial investment" and one that should enable "substantial progress." But it is the longer term plan that will decide whether or not Australia is able to establish a workable and effective e-health infrastructure.
"Now the challenge is to deploy the investment into a tangible, realistic workplan that can deliver real outcomes for Australian patients and clinicians," CSC director of health services Lisa Pettigrew said.
The company says much will depend of the successful passage of the IHI legislation. The company's global head of healthcare Deward Watts - who was in Australia for the Budget week - says a modern healthcare delivery system is dependent on a strong, integrated records management system for both patients and providers.
"CSC is looking forward to seeing the important Healthcare Identifier legislation passed as soon as possible by the Senate to further advance Australia's progress," Watts said.
"Australia has taken an important step forward tonight with regards to e-health. An important further step will be the introduction of unique patient healthcare identifiers."