McGinness said there was a lot to digest in the 123 recommendations of the National Health and Hospitals Reform Commission report.

"If all of them were to be adopted we would inevitably see legislative change. New business opportunities would arise - for example e-health solutions. There will be a myriad of legal issues and we would expect our health and ageing team to be involved, advising public and private sector clients on the implications as the Government unfolds its policies in response to the report," he said. "We would inevitably see legislative change, as well as significant operational and organisational changes."

While the commission did not call for immediate federal takeover, he said, it did propose a change that would subject state health systems to competition from non-commercial and not-for-profit "health plans" financed by the Federal Government.

McGinness said obtaining state co-operation for such a proposal would depend on whether the Government wanted to control funding or the system itself.

"The Commonwealth may consider whether such policies could be underpinned by exercising its executive powers through funding agreements .The Commonwealth may also consider whether any of the constitutional heads of power could be relied upon to control state health systems," he said.

"Over the last decade or so, there has been increased scope for the Commonwealth to rely upon the corporations power to support its policy initiatives. Whether this would be sufficient to support control of health funding will depend on the details of any proposed scheme."

The commission also recommended that an e-health record be introduced by 2012 for all Australians. McGiness said privacy was clearly an issue that would need to be addressed as part of any e-health solution.

"However, I don't think this will be a material influence on medical malpractice claims. An effective e-health record will present significant benefits for individuals and the economy as a whole," he said.

- Sarah Sharples