NSW public health physicians believe the state's daily COVID-19 figures are at least 50 per cent higher than the reported number, due to unreported positive results.
Between 15,000 and 20,000 positive results are being recorded each day, which Health Minister Brad Hazzard described as a "big underestimate".
"Many people are not, it would appear, not actually reporting the positive cases," he said.
"We understand that they may have symptoms that are very mild and they just don't think it's necessary.
"We would like them to report it, because it helps us to track the COVID cases through our community."
NSW recorded 12 deaths and 19,183 new cases in the latest reporting period, with about 13,000 of those from rapid antigen tests.
Fifty-six of the 1,467 people in hospital are in intensive care.
Mr Hazzard said the Health Department had begun analysing randomised interviews of hospital patients who may not have been admitted due to COVID, but might have had COVID in the past.
It is hoped those interviews will provide greater clarity on the true number of infections in the community, he said.
"The public health physicians are of the view that it's at least 50 per cent more — and it could be even higher than that — than we're currently seeing in the numbers each day."
Mr Hazzard said the single biggest issue for NSW remains that close to 40 per cent of those aged over 16 who are eligible for a booster have not had it.
"My strong advice to all of those people is go and get your booster," he said.
"It costs nothing but it could end up costing your life or another family member's life if you don't have it."
The Australian Health Protection Principal Committee (AHPPC) last week suggested quarantine requirements for close contacts of COVID-19 cases could soon be removed in favour of frequent rapid antigen tests, working from home, wearing masks when leaving home and avoiding high-risk settings.
But Mr Hazzard described that as "lowest common denominator advice" for every state and territory and said in NSW, where there are a "substantial" number of cases each day, people should still exercise "extreme caution" while enjoying "a good balance of life".
Mr Hazzard urged people to continue using masks, exercising good hand hygiene and maintaining social distances.
The Minister said both he and Chief Health Officer Kerry Chant were against removing restrictions around close contacts.
"We also need to understand that removing all of the restrictions around close contacts would, at this point, in my view and the view of Dr Chant, be counterproductive," he said.
Mr Hazzard said the state government remained "very aware" of the impact on hospitals of the convergence of COVID-19 and the flu season, with planning underway to manage the situation.
