Health care reform aim to improve the value delivered by the health care system. The introduction of Medicare established a national health insurance scheme but did not change the funding architecture of the Australian health care system, namely the Pharmaceutical Benefits Scheme, the Medicare Benefits Schedule, and hospital funding. These funding mechanisms have been successful in improving access and as a result increasing the volume and costs of health care. However, this has also led to significant problems including rising expenditure, poor co-ordination, fragmentation of care, lack of flexibility in care provision and low-value care. Addressing these problems may require addressing our basic funding architecture. We argue that changes in the funding architecture are necessary to move towards a value-based healthcare system.