The Labor government has paused funding of hospitals so that negotiations on National Disability Insurance Scheme (NDIS) reforms can catch up, Federal Minister Mark Butler told Health ministers Friday.

The state and territory health ministers wrote to Butler demanding more funding to hospitals from the federal government as the current funds will be exhausted by year end. However, Butler said he has been directed to pause hospital funding to allow disability negotiations to "catch up," ABC News reported.

"I'm keen to restart that process as soon as we possibly can, there's been a really good level of consensus amongst health ministers about what the next possible funding deal should look like. But obviously, we've got to wait until disability ministers and others are able to progress their work," Butler said.

The NDIS is projected to grow at 10.4 per cent annually over the next decade, making it the highest-growing government expenditure.

At the national cabinet meeting last year, the state and territory governments agreed that they would pitch in to the NDIS scheme, in accordance with its growth at 4% and capped at 8%, with the federal government covering the remaining cost in July, 2028. In addition, they committed a package worth $1.2 billion to hospitals towards the National Health Reform Agreement and Medicare, and the government agreed to contribute towards setting up more number of urgent care clinics.

The costs are expected to reach $50 billion by 2025/26, which is higher than the annual bill for Medicare, AAP reported.

Defending the move to put on hold hospital funding during NDIS reform negotiations, Prime Minister Anthony Albanese said, "We want to make sure, with state and territory governments, that we move forward on the reform program. We need to continue to strengthen Medicare ... and we need to continue to ensure that the NDIS is sustainable going forward so that people with disabilities get the support and help they need. That is what we are doing through the national cabinet process."

But, as winter sets in, diseases and viruses such as COVID-19, the flu and RSV are weighing on the health systems, health ministers pointed out in their open letter. They added the health system everywhere in Australia is under pressure.

"We recognize that the situation has been exacerbated by a decade of freezing Medicare rates and aged care underfunding," the letter said. "But there is more that can be done and needs to be done to tackle this national crisis."

The health ministers have asked the government to implement programs that would grant 45% minimum funding for each patient in public hospitals and support aged patients in hospitals.