The former prime minister believes priority should be given to how young Indigenous people are treated when they are separated from their immediate family because of abuse or neglect.
"Better use should be made of wider families and kinship groups," he told ABC radio from New York on National Sorry Day.
"This is an area which needs a lot more effort."
'Sorry Day' has been held on the 26 May since 1998. The first Sorry Day took place one year after the tabling of The Bringing Them Home Report in parliament.
A national day of commemoration was one of the recommendations made by the report.
""Arrange for a national 'Sorry Day' to be celebrated each year to commemorate the history of forcible removals and its effects,"the report recommended.
The anniversary of the National Apology is a day which commemorates Mr Rudd's formal apology to Australia's Indigenous peoples and those whose lives had been affected by past government policies of forced child removal and assimilation.
A huge range of community activities took place across Australia on Sorry Day in 1998.
Sorry Books, in which people could record their personal feelings, were presented to representatives of the Indigenous communities. Hundreds of thousands of signatures were received. People could also register an apology electronically.
Sorry Day continues to be an important annual event in the Australian calendar, with marches, speeches and presentations being held through the country.
Today on National Sorry Day you can show your support towards the healing for the Stolen Generations, their families and communities by wearing a native hibiscus flower - which is a nationally endorsed symbol of the resilience and survival of the Stolen Generation.
Money raised from sales of the flower helps the Kimberley Stolen Generation Alliance contribute back to country, collective healing camps, arts and crafts healing activities and day trips to places of significance.