Introduction: The Australian Government recently announced major reforms to the health system - A National Health and Hospitals Network for Australia's Future. The national health reform plan involves substantial structural change which the Government expects will deliver 'better health and hospitals' for future generations. Approach: A review is undertaken of the proposed set of reforms to determine whether its frame of reference can contribute to the effective achievement of the desired health and hospitals outcomes. Findings: The national health reform plan was found to have two striking weaknesses. Firstly, it fails to account for the political, cultural, behavioural and professional aspects of change. Secondly, it fails to position leadership and health management as central to the implementation of reform. Conclusion: The complexity of major structural change is such that major health reform strategies need to incorporate proper assessment of organisational behaviour aspects within a system which values the central roles of leadership and health management. A new leadership model for introducing health reform is presented.