Australia's health care system is at a crossroads. It is recognised that the fragmentation of health services, largely caused by the split between Commonwealth and state government funding responsibilities, is undermining patient care. The National Health and Hospitals Reform Commission (NHHRC) has advanced two models of health-system governance to redress this situation - neither incorporating the regional approach so prominent in submissions to the NHHRC and included in Option B of the NHHRC interim report. A regional governance framework such as that described in this paper could keep faith with the importance widely given to local engagement during the consultation process; sit neatly within the NHHRC's Healthy Australia Accord option; make regions responsible for funding allocation and service delivery; eliminate major weaknesses in our current system; and provide stability to the system at a time of significant reform.