A commonwealth takeover of state public hospitals is still possible, Prime Minister Kevin Rudd says.

Mr Rudd made the comment as a federal report on the state of Australia's health system was being released.

He said he would not rule out the commonwealth taking over the health system.

"I was absolutely clear cut about that possibility at the last election," Mr Rudd told reporters in Brisbane on Tuesday.

"The government must work through the policy debate with the states and territories.

"We now have a big challenge of reform for the future. (What) we intend to do is roll up our sleeves, work through the recommendations of the report, work through it with the states and territories and get on with implementing long-term reform."

Before the 2007 poll, Labor said it would seek a mandate for a federal takeover of public hospitals if the states and territories had not begun implementing a national reform plan by midway through this year.

Federal Health Minister Nicola Roxon said the government would wait until it had "carefully considered" the final report of the Health and Hospitals Reform Commission, which it will receive today.

AAP