Almost two-thirds of public hospital psychiatrists are poised to resign from NSW Health over a pay dispute, exacerbating existing vacancies.
Contingencies being utilised by the state Labor government include directing public patients to the private health system.
The peak industry body representing private hospitals says the situation in NSW should be a catalyst for action at a national level.
"If the (federal) government doesn't act promptly, the entire system - public and private - crumbles," Australian Private Hospitals Association chief executive Brett Heffernan told AAP.
"We've got a situation where public psychiatrists are overwhelmed, with a massive backlog of patients, and private hospitals with spare capacity can't step in because there aren't enough psychiatrists available."
The association wants the federal government to remove a requirement for overseas-trained psychiatrists to work in rural or regional areas for a decade before gaining access to Medicare rebates.
"This would immediately relieve pressure on the public system while making better use of private sector capacity," Mr Heffernan said.
"The only thing stopping the throughput of patients through private hospitals is the availability of psychiatrists."
He said the approach of sending public patients to private hospitals would be ineffective unless workforce restrictions were eased.
"This has been an unfolding crisis for the last couple of years, and it has now come to a head," he said.
"The federal government should be pulling out all stops to ensure there are enough psychiatrists in the system."
The Royal Australian and New Zealand College of Psychiatrists acknowledged the moratorium as a contributing factor to workforce shortages but emphasised the need for broader systemic reform.
"The reality is the moratorium is not the leading cause of the shortage, nor a silver bullet solution," the group's president Elizabeth Moore said.
"While it would be a helpful step in the right direction, Australia needs a nationally coordinated workforce growth plan, with federal, state, and territory governments working together to attract, train, and retain a sustainable pipeline of both local and overseas-trained psychiatrists."
While critics of lifting the moratorium argue it risks creating a brain drain from public hospitals and rural and regional areas, proponents contend it will not have a significant effect.
"Those psychiatrists who want to work in private hospitals are being prevented from doing so - it doesn't really affect those in the public system," Mr Heffernan said, adding it was "untenable" to delay a decision until after the federal election.
Federal Health Minister Mark Butler was contacted for comment.
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