Australia's leading health experts say doctors should get extra pay if their patients' health improves.

The suggestion is part of a number of recommendations from a new report by 30 healthcare experts and community representatives, including the George Institute for Global Health, the Consumer Health Forum, the College of GPs and the Royal College of Physicians.

Professor Vlado Perkovic, Executive director of The George Institute for Global Health Australia, said sweeping changes are needed to how Australia's healthcare system is funded.

"The healthcare system works well for many people, but there are growing issues, especially around funding, that must be addressed to ensure it is sustainable for the next 20 years," Professor Perkovic said.

"We also know that in 2013, 14 per cent of people did not visit a doctor because of the cost, a figure which grows to 24 per cent for someone with chronic disease."

Among the recommendations from the coalition of health groups is a blended payment system for doctors, keeping the current 'fee for service' model, but adding in other payments promoting better patient care.

"This type of system will enable co-ordinated management of people with long term and chronic conditions, create the right incentives for patient-centred care and address some of the current drivers of unnecessary cost escalation, whilst preserving elements of the current system that work well," Professor Perkovic said.

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The suggestion comes as new statistics from the Australian Institute of Health and Welfare reveal 50 per cent of Australians live with a chronic illness.

Minister for Health Sussan Ley said it was concerning that half of all Australians have one chronic disease.

"One in five have at least two of the most common eight chronic diseases including diabetes, cardiovascular disease and mental health conditions," she said.

The government is currently reviewing how patient receive medical care in Australia.

Primary health care advisory Health Care Group, headed by former Australian Medical Association president Dr Steve Hambleton, has released a discussion paper and will hold public forums over the next three weeks.

The government is likely to make recommendations public in the coming weeks but health groups urged the government to take a long-term view of healthcare reform.

"We urge the government to act quickly, but act for the future and avoid the temptation to implement band-aid solutions that look good in the short term, but would then require further reform," Professor Perkovic said.