The federal government's $2.9 billion injection into public hospitals is inadequate as the system struggles under enormous pressure, a Senate inquiry has been told.
Australian Medical Association president Brian Owler says the extra funds offered at the last Council of Australian Governments (COAG) meeting was an improvement on the "grossly inadequate" funding set out in the 2014 budget but still won't be enough.
"I think we will see a decline in performance and the range of services that our public hospitals are going to be able to provide," he told a Senate inquiry on Wednesday into the outcomes of the April COAG meeting.
Treasury official Jonathan Rollings said it wasn't possible to pinpoint how the extra money would be divided between the states and territories.
The inquiry was told the Federation reform green and white papers would no longer go ahead.
It also revisited Prime Minister Malcolm Turnbull's short-lived proposal, rejected at COAG, to allow states and territories to raise income tax in order to fund services like hospitals themselves.
Officials from Treasury and the Department of the Prime Minister and Cabinet said both Mr Turnbull and Treasurer Scott Morrison received briefings on the state income tax proposal on January 22, after the idea was initially raised by NSW Premier Mike Baird in March 2015.
Both received further briefings in the lead-up to the prime minister taking the proposal to cabinet on March 22.
But PM&C official Luke Yeaman said the proposal was not incorporated in formal papers prepared for the COAG meeting.
The states received no documents on the proposal ahead of the meeting and no formal briefing.
PM&C head Martin Parkinson had informal discussions with state counterparts.
Treasury deputy secretary Michael Brennan said he would have had general discussions with "a few states" about the upcoming COAG, but wouldn't say which state counterparts he spoke to.
When asked by senior Labor senator Penny Wong why states received nothing in writing about a proposal hailed by Mr Turnbull as the largest reform in 40 years, officials insisted it was normal.
"It's not unusual for us, either us or the states, to raise issues in the COAG context without papers," PM&C's Alison Larkins said.
Prof Owler hit out at what he says are misconceptions about hospital funding and the "annoying" notion that enormous savings can be made just by being more efficient.
Emergency departments were being filled by the sickest patients, contrary to reports that it's people who should be visiting a GP.
Hospitals were being forced to shut down elective surgeries for extended periods or cut back on staff and the services they offer to save money.
The government's plan to focus on primary care and keep people out of hospital was important, but not the answer.
"We really are not meeting the demands that are out there," Prof Owler said.
"I do worry that patients are obviously suffering needlessly."
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