He said NSW Health should refund patients the cost of medication to treat any infections they picked up in hospital, which is often the result of staff not adequately washing their hands, and staff should wear colour-coded uniforms to be easily identifiable. Mr Garling, who visited 61 hospitals, took more than 1200 written submissions and heard from 628 witnesses, also said that the health system was plagued by bullying, which he said was "endemic" in hospitals.

His report said that the shortage of doctors in the public system could take years to improve and warned that 22 per cent of nurses in NSW would qualify for retirement in three years. "To start with, a new culture needs to take root which sees the patient's needs as the paramount central concern of the system and not the convenience of the clinicians and administrators," the report said. "Given the demographic changes and rising costs, it is the case that we have entered into a period of crisis for a public hospital system which has always been free and accessible to all. We are on the brink of seeing whether the public system can survive and flourish or whether it will become a relic of better times." The NSW Health Minister, John Della Bosca, called it a "landmark report" that would significantly improve the way health care was delivered.

But he conceded that the system had been "stressed and stretched". The inquiry was begun after criticism from the Deputy State Coroner, Carl Milovanovich, who warned that systemic problems had contributed to the death of teenager Vanessa Anderson at Royal North Shore Hospital.

Vanessa, who was hit by a golf ball in 2005, died from respiratory arrest due to the depressant effects of opiate medication after a doctor misread her chart. The Premier, Nathan Rees, said the Government would formally respond to the Garling report by March. Mr Rees said the report had practical and strategic suggestions that would "set the system up for the way forward".

Mr Rees said he would support Mr Garling's recommendation that an independent body report to Parliament on the implementation of the reforms. However, Mr Rees said he would need advice before committing to a single health service, called NSW Kids, for newborns and children needing acute care.

Kim Oates, the professor of paediatrics and the former head of the Children's Hospital at Westmead, welcomed the concept of a single health service as long as it was not a cost-saving measure for the Government. Kerry Goulston, a Royal North Shore Hospital gastroenterologist and spokesman for the Hospital Reform Group, said the successful implementation of the recommendations hinged on bipartisan support and an independent, transparent body overseeing the reform. Professor Goulston said that senior clinicians were "very confident" that Mr Garling's report had the potential to turn the tide on the health system. "We support 100 per cent the whole report. We think it's an extraordinary thing," Professor Goulston said.

The Opposition Leader, Barry O'Farrell, welcomed the report, which he said "exposed the decade-long Labor mismanagement of the state's health system".