It comes as the Western Australian government has agreed to sign up to a national hospitals plan after 18 months of wrangling with Canberra.
Premier Colin Barnett announced that his cabinet had agreed to the National Health Reform package and would sign it by Tuesday.
"That has been a very contentious issue for the last 18 months," he told reporters.
The premier said that when the reform package was first announced under former prime minster Kevin Rudd, the proposal was for the states to lose one third of their GST revenue to fund it.
"Western Australia was the only state that stood out against that and we refused to sign that agreement."
Mr Barnett said that since then other states had progressively pulled back from the deal and the reform was now being pursued on the basis of health care, not financial issues.
"Western Australia will retain its GST and we will control all state government funding going into the pool arrangement," the premier said.
Mr Barnett said his government saw merit in pooling federal and state funding to improve hospital care across Australia, but still had concerns about the planned size of the federal bureaucracy under the proposed plan and some primary health care issues.
He said that if the WA government did not sign, the state would have to risk losing future, and perhaps even existing, commonwealth funding to support its hospitals.
WA Health Minister Kim Hames said the federal government had "given enormous ground", allowing the WA government to sign the deal.
He said a model put forward by the Victorian government to set up separate funds to be managed by the states had finally been agreed to by the federal government and that helped broker the deal.
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