Health minister Greg Hunt says he is hopeful of making progress on states and territories 'harvesting' privately insured patients as a revenue-raising mechanism.
Speaking on Adelaide-based radio station 5AA, Mr Hunt said the practice needs to stop "because it will blow out the waiting lists for public patients" for those without private health insurance.
"...they have to wait longer because the private patients were being given a fast-track by some governments, in particular Queensland and Victoria," he said.
Mr Hunt said the practice also puts upward pressure on private health insurance premiums.
Data from the Australian Institute of Health and Welfare revealed a significant jump in the number of public hospital separations funded by private insurers.
The report showed private health insurance-funded hospitalisations in public hospitals increased from 8.2 per cent of all hospitalisations in 2006–07 to 13.9 per cent in 2015–16 - an average annual increase of 9.6 per cent.
At the same time, private health insurance-funded hospitalisations in private hospitals increased at an average annual rate of just 4.9 per cent.
A discussion paper from the Department of Health revealed similar data, with the percentage of public hospital separations funded by private health insurance increasing nationally from 10.5 per cent in 2010-11 to 14.1 per cent in 2014-15.
In New South Wales, private health insurers covered over one-in-five public hospital separations in 2014-15.
A massive spike in Queensland reflects what appears to be a systematic approach to pressuring patients into being treated privately in the state's public hospitals.
The Queensland state government introduced quotas in 2010. The annual growth in public hospital stays for private patients rose from 7 per cent before 2010 to 12 per cent in the years after.
The discussion paper found that, if the number of private patients in the public sector had grown at the same rate as private patients in private hospitals since 2010-11, premiums in 2015-16 would have been about 2.5 per cent lower.
The new hospital agreements between the federal and state governments include measures designed to resolve the practice of 'harvesting'.
Under the agreements, governments will, "...develop reform initiatives to improve admission policy and practices to support patient choice, and to deliver comprehensive data provision and more consistent financial reporting on private patients."