The NSW health minister believes a funding rethink is crucial as states and territories renegotiate a national health reform agreement with the federal government.
Brad Hazzard also told a Friday business event he didn't think "anywhere near enough" had been done to work with the private sector in the delivery of the state's health services.
Mr Hazzard addressed the Committee for Economic Development of Australia about the future of the health system and its challenges, including a fast-growing and ageing population.
He said the NSW public sector couldn't meet those challenges alone, and collaboration was needed with the private sector, non-government organisations and federal colleagues.
On federal collaboration, he said states and territories were negotiating the national health reform agreement which "presented certain challenges".
"The state and territory ministers met by ourselves actually a couple of months ago and expressed our concerns about trying to get the national health reform agreement redone," Mr Hazzard said.
"Our big frustration is the fact that we need to have reform."
He said rethinking the funding model was "crucial" and they needed to "think around the fact that the federal government has massive funds obviously coming into it but we only see a certain portion".
The health minister said he didn't think enough had been done on working with the private sector in NSW, but it was on his agenda.
"Because why do we need to keep building new facilities on all occasions ... when there are often private facilities nearby who can provide those services through contractual arrangements?," Mr Hazzard said.
"That's one big area for us."
Australian Associated Press