Martin Bowles outlined the draft plan to his 3500 mostly Canberra-based staff on Wednesday, saying it would help create a better working environment.

The restructure, an outcome of a confidential "functional and efficiency review" carried out in recent months, is expected to save about $25 million a year.

It was also guided by the findings of a highly critical review last year, which warned that staff suffered from overwork, risk aversion, micromanagement and "inappropriate behaviour" such as bullying.

Mr Bowles, who became the department's secretary eight months ago, told employees the organisation was already "about the right size" for its role.

"There will be some need to move the right people into the right roles, and build our capability in key areas, but I want to be clear that this realignment process is not a job-cutting exercise," he said.

"There will be no job losses under these new arrangements."

Rather, the overhaul aimed to improve the department's "strategic policy" ability and make its structure more rational. For example, it would bring together teams with similar roles, such as regulation or administrative support, and separate staff with different focuses, such as indigenous health and rural health.

Mr Bowles also said it was every officer's responsibility to commit to "a culture of respect, openness and trust".

"I have an expectation of my leadership team and everyone at Health that you will make the same commitment."

Last year's independent "capability review" of the Health Department was among the most unflattering in the series of similar reports published by the Public Service Commission.

The review praised Health's committed, well-educated and "highly capable employees" but catalogued many cultural problems.

Senior executives took on too much responsibility, "with many noting an average of more than 80 hours a week", and some EL2 officers were loath to be promoted for fear of how it would affect their work-life balance.

About one in five staff said they were subjected to harassment last year, a higher incidence than elsewhere in the bureaucracy.

"The evidence collected ... describes behaviours including verbal abuse, throwing of documents, withholding of information, intimidation and exclusion."

The review also found that, despite the efforts of former secretary Jane Halton "to break down silos", staff and outsiders who dealt with the department described it as "bureaucratic, siloed, inefficient, old-fashioned and complex".

"The review team found widespread employee frustration at the regularity with which documents repeatedly travel up and down chains of command. There is evidence of documents being rewritten numerous times in response to feedback from SES."

Mr Bowles asked staff on Wednesday to "reflect on your behaviour and that of people around you" and urged them to call out or report any substandard conduct.

The Health Department has so far escaped deep staff cuts under the Abbott government despite the Coalition questioning its purpose on many occasions before the election.

When he was opposition leader in 2012, Tony Abbott, who is a former health minister, asked whether the department "really needs all 6000 [sic] of its current staff when the Commonwealth doesn't actually run a single hospital or nursing home, dispense a single prescription or provide a single medical service".

The government's white paper on the federation, due to be released next year, is considering the department's long-term role.