The barney between state health ministers and the Federal Government over hospital funding has been called off after they struck a $25 billion, five-year deal.

The deal also involves delaying the Thriving Kids program — the Federal Government’s planned National Disability Insurance Scheme alternative for children with developmental delays or autism — from its originally scheduled start date of 1 July.

The state governments have spent months demanding more hospital funding in response to spiralling costs, caused by inflation, workforce shortages and increasing numbers of complex, frail patients being stuck in hospitals while waiting for aged or disability care.

They said the long-term funding deal signed in December 2023 involved the Federal Government steadily raising its contributions to eventually reach 45% of hospital costs by 2035.