Cultural competence strategies aim to make health services more accessible for patients from diverse cultural backgrounds. Recently, such strategies have focused on specific groups, and particularly Indigenous Australians, where services have failed to address large disparities in health outcomes. Limitations of cultural competence largely fall into three categories: lack of clarity around how the concept of culture is used in medicine, inadequate recognition of the "culture of medicine" and the scarcity of outcomes-based research that provides evidence of efficacy of cultural competence strategies. Narrow concepts of culture often conflate culture with race and ethnicity, failing to capture diversity within groups and thus reducing the effectiveness of cultural competence strategies. This also hampers the search for evidence linking cultural competence to a reduction in health disparities. Attention to cultural complexity, structural determinants of inequality and power differentials within health care settings not only provide a more expansive notion of cultural competence and a nuanced understanding of the role of culture in the clinic, but may assist in determining the contribution that cultural competence strategies can make to a reduction in health disparities.