The use of information technology (IT) in the health sector is critically important for enhanced patient care and ultimately cost savings. However, the uptake of IT in health has been slow when compared with other industry sectors, due to the range of issues and IT inconsistencies associated with the needs of its stakeholders. This study explored the challenges experienced by 108 New Zealand medical practitioners in their IT interface with other key primary and secondary health providers. We found IT interface challenges were negatively related to e-business activity (receiving) but held no effect on e-business activity (sending). Further, we tested for and found significant moderating effects of practice size, based on patient numbers. Large practices were able to buffer the negative influence of IT interface challenges on e-business activity (receiving), while small practices were severely hampered by IT interface challenges. The implications of operating in a modular industry structure are discussed.