The father of an 11-year-old boy who was photographed, made to dress up and perform a sex act by a psychologist at Royal North Shore Hospital was discouraged by a hospital representative from going to the police, an inquiry has heard.

In what was described as "play therapy", hospital psychologist Stuart Simpson abused Terence Kirkpatrick on five occasions between 1967 and 1968, the inquiry heard, while his mother was waiting outside the consulting room.

It is just one case study referred to by the Royal Commission into Institutional Responses to Child Sex Abuse, in its examination of public and private health care providers and regulators.

The report found the North Sydney Local Health District was unable to locate any records of a complaint, following the incident involving the child.

At the time, Mr Kirkpatrick's father was also discouraged by a hospital representative from reporting the incident to police, to prevent his son from "interrogation and all those distressing things".

Northern Sydney Local Health District chief executive Vicki Taylor said the department was concerned by the findings in relation to Royal North Shore Hospital.

"We ... are deeply sorry for the pain and suffering caused to the survivors of abuse and their families," she said, adding that all such matters were taken "very seriously".

Associate Professor Taylor said much had changed since that time and rigorous internal policies and procedures were now in place.

The commission found trust in medical practitioners and the private one-on-one nature of medical therapy can place children in vulnerable positions.

North Sydney's Royal North Shore Hospital, the Medical Council of NSW and the Health Care Complaints Commission (HCCC) were among the institutions addressed in the royal commission's report, which examined their responses to allegations of child sexual abuse.

The report found that medical institutions in particular were unique because they treated vulnerable patients in a state of illness. Those patients placed their trust in practitioners, such that they permitted them "to view and touch intimate parts of [their] anatomy".

"Patients permit these acts because of the close nature of the health practitioner/patient relationship and because they believe that a health practitioner is acting in pursuit of a higher purpose of assisting the patient with his or her illness or injury and not out of personal sexual gratification," the report said.

The royal commission identified several failures in the handling of complaints and reports, such as allegations received by the then NSW Medical Board (now the Medical Council of NSW) in 1992, regarding the sexual abuse of teenage boys by Dr John Rolleston.

No documents were provided by the medical board disclosing the process of dealing with the complaint, which was deemed "clearly not satisfactory" by the royal commission.

The royal commission heard that the medical board failed to make links between the 1992 complaint about Dr Rolleston, when a new complaint of child sexual abuse against him was made to the HCCC in 1998.

In addition the HCCC's handling of the complaint was deemed "lengthy" with "unacceptable delays".

A spokeswoman for the HCCC said its then-commissioner Kieran Pehm acknowledged in his evidence before the royal commission that the delays were unacceptable.

"The commission now has systems in place to avoid these sorts of delays, and the average investigation time-frames are now much better than they were in 1998-2001, with the majority of investigations finalised in less than 12 months," she said.

The royal commission found the medical board failed to exercise its statutory powers to protect the public under Section 66 of the Medical Practice Act, prior to 2009.

It recommended further education and training for medical practitioners, to address the misunderstanding of reporting obligations concerning historical child sexual abuse under the Children and Young Persons (Care and Protection) Act.

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