No reason for hospitals to shut: Gillard

There is no reason hospitals would close under the federal government's proposed health reforms, Deputy Prime Minister Julia Gillard says.

A senior NSW health clinician has identified 117 state hospitals that would struggle to survive under the federal government's proposed reforms.

But Ms Gillard said hospitals would close if the government did not act.

"There is no reason a hospital would close under our plan," she told the Nine Network.

"But I can guarantee what the alternative is ... if we don't act health costs will become unsustainable for state governments, eat all of the state government budget.

"Where's the money for schools, where's the money for police, that's going to add up to hospital closures and a very bad time for patients."

Rudd: States won't block reform

Earlier, Kevin Rudd insisted that the states will not be allowed to block health reform.

Reiterating his belief that "health bureaucrats" are using scare tactics in NSW to undermine plans for a federal takeover of public hospitals, Mr Rudd said the reforms would be going ahead whatever.

"We will speak directly with the states between now and when the Council of Australian Governments convenes in the first part of April," he told reporters in Sydney on Friday.

"I've written to all the state premiers and chief ministers, and there is going to be huge amount, to use the technical term, of argy bargy between now and when the Council of Australian Governments meet.

"Some may agree, some may disagree ... some may tell us to jump in the lake, but you know something, that will not stand in our road."

Mr Rudd was speaking after he and federal Health Minister Nicola Roxon toured parts of St Vincent's Hospital and the Garvan Institute of Medical Research in Sydney to meet patients.

Mr Rudd said no hospitals would close as a result of the reforms, which involve stripping states of some GST revenue and using it to increase the commonwealth's contribution to funding of state hospitals.

A report in Sydney's Daily Telegraph newspaper alleges that 117 smaller NSW hospitals will close due to Mr Rudd's funding reforms.

The chairman of the Sydney Illawarra Health Service's health advisory council, Bob Farnsworth, has said all of NSW's smaller hospitals are at risk under the federal reform plans.

Mr Rudd has accused "health bureaucrats" of running a scare campaign over the issue.

"There is absolutely nothing in any one of the reforms that we would put forward in this plan that would cause any hospital in the country to close," he told the Seven Network on Friday.

"What you have at present is a campaign... by various state governments in Victoria and NSW against any change.

"Therefore you have a deliberate fear campaign that is put out there by various state health bureaucrats at the moment in NSW about hospital closures."

Asked later if the NSW government was orchestrating the campaign, Mr Rudd told reporters at St Vincent's: "Why the NSW health bureaucrats are out there saying these sorts of things .. (is a) matter for them, you can sort that out."

NSW Health Minister Carmel Tebbutt denies she or her senior bureaucrats are mounting a scare campaign against the commonwealth's hospital reforms.

She again gave her tentative backing to the proposals but reiterated that NSW was still looking at the plan's details.

"My comments are on the public record, and my comments have been consistent," she told reporters.

"The list in the Telegraph could have been compiled from public information that is already available in various different NSW Health reports.

"I had absolutely nothing to do, my office had nothing to do, with that information getting out into the public domain."

Opposition Leader Tony Abbott says the prime minister never fully understood the complexities of health reform.

"Part of the problem is that, he (Rudd) said himself, he never understood the complexity of all this, Mr Abbott says.

"Well, you wonder whether he's got the policy right, perhaps the whole thing has been misconceived if he never understood the complexity," Mr Abbott told ABC Radio on Friday.

"I think what we're seeing here ... is a pattern of failure, a government which has grandiose plans but which is not very good at delivering them, in part because the prime minister is such a control freak," he added.

The opposition's Council of Australian Governments spokeswoman Marise Payne has accused the prime minister of trying to rush the process.

"Forcing states into an agreement within one month... seems to us to not to be a particularly sound example of co-operative federalism," she told ABC Radio.

Meanwhile, a leading health group says the Rudd government doesn't need to wait for state approval of its hospital plan to move public patients on waiting lists into private hospital beds.

Catholic Health Australia says an investment of $450 million would move the estimated 89,000 patients on public surgery waiting lists into private beds.

"There is the option today of using private hospital beds to treat a large number of those people, you don't have to wait," CEO Martin Laverty told ABC Radio.

"The prime minister could provide the funds to use available private hospital beds."

Mr Laverty says "it's not a lot of money" in the broader health budget, and won't lead to a mass exodus from the private system.

"There is always going to be a robust private health market."