Public health and consumer groups have questioned whether Telstra and other private companies could profit from millions of Australians' cancer screening records.

Fairfax Media has reported that Telstra Health - a division of the listed company - has been awarded a government contract to manage a new national cancer screening register next year.

The register - merging data from nine non-profit run registers - will allow GPs to access a single record of their patients' cervical and bowel cancer screening history. It will also show their eligibility for future tests from next May.

Telstra Health's managing director, Shane Solomon, said this would make it easier for patients to keep up to date with upcoming screenings through mail and potentially mobile text messages, and would overcome duplication when people changed doctors or moved interstate.

The Department of Health released a statement on Thursday to assuage privacy concerns, saying federal laws would ensure that "the data included in the register (will) continue to be owned by the Commonwealth and cannot be used for any other purpose".

Mr Solomon said Telstra would not charge for access to data and denied that it could be used to help develop the company's products.

The company said in a statement that people would be allowed to access their own records online, and that their GPs would need consent to do so.

Yet consumer health groups warned more information was needed about how the contract protected patient records from commercial gain.

Alison Verhoeven, chief executive officer of the Australian Healthcare and Hospitals Association said that while the register could increase the number of people screened for cancer, it was unknown who would control access to the data and publish public reports.

Ms Verhoeven said she was concerned that  "a proliferation of private organisations could be housing data many of us hold dear in a commercial environment over which there is very little control and capacity to contribute to."

The Consumer Health Forum's chief executive officer Leanne Wells said the government should require Telstra to comply with "rigorous safeguards" for privacy, security and clinical accuracy.

"Consumers need reassurance that patient data is protected and not used for purposes other than for the benefit of patients," she said.

Labor said the announcement indicated the Turnbull government was moving closer to privatising Medicare, with a department taskforce currently considering whether to outsource its payment system.

A spokesman for shadow health spokeswoman Catherine King said Labor would honour any contract but said one of the current non-profit agencies that currently maintained screening data would have been more suitable for the contract.

"While we support the establishment of a national cancer registry we strongly believe this this is the wrong decision for such highly sensitive personal data."

Mr Solomon said Telstra Health would abide by a federal government "data access and release policy".

The Department of Health said the register would support GPs to make real-time clinical decisions for about 1.4 million women who would be invited to undergo cervical cancer tests and almost 10 million people eligible for bowel cancer screening over the next four years.

The Criminal Code deterred data from being misused and current privacy laws ensured only "personal information that is directly related to the register may be collected, used and disclosed."

It also said that the register would be built using software already used in Australian clinical settings, which "has built-in provisions to protect and hold patient and clinical information securely. All data will be stored in Australia in secure data storage facilities."

Privacy commissioner Timothy Pilgrim said government agencies were legally required to include privacy obligations in their contracts with all external providers.

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