Australia is leading the way in establishing a national system (the Palliative Care Outcomes Collaboration - PCOC) to measure the outcomes and quality of specialist palliative care services and to benchmark services across the country. This article reports on analysis of data collected routinely at point-of-care on 5939 patients treated by the first fifty one services that voluntarily joined PCOC. By March 2009, 111 services have agreed to join PCOC, representing more than 70% of services and more than 80% of specialist palliative care patients nationally. All states and territories are involved in this unique process that has involved extensive consultation and infrastructure and close collaboration between health services and researchers. The challenges of dealing with wide variation in outcomes and practice and the progress achieved to date are described. PCOC is aiming to improve understanding of the reasons for variations in clinical outcomes between specialist palliative care patients and differences in service outcomes as a critical step in an ongoing process to improve both service quality and patient outcomes.