The Australian Labor Government recently announced a significant change to the structure of the Australian health care system - 'A National Health and Hospitals Network for Australia's Future'. The proposed reforms involve major structural change to the current health and economic systems so as to allow the required financing and governance foundations. It is widely recognised as the most significant health reform since Medicare was set up. Despite evidence from the United Kingdom, Europe, United States and Canada that health reform strategies rarely realise planned efficiencies and improvements, the Australian Government has created high expectations that it will deliver better outcomes and sustainable improvements in hospitals and health care. One likely impediment to success is that it is widely recognised that the Commonwealth and States generally lack the capacity and capability to lead such a major implementation process for reform. Unfortunately, this lack of skill and capacity is not just confined centrally, but exists at the local health service level among the health care professionals who are expected to provide leadership, management and support for the new arrangements in governance. Recent research in Australia indicates that appropriately qualified and experienced health managers are of central importance to the successful implementation of reform. However, the proposed reform package fails to account for this. This article aims to review the proposed national health reforms and to determine whether these new arrangements can contribute to or preclude the desired achievement of better health and improved hospital care for us all.