The four major metropolitan hospitals which spent the least on care for acute, admitted patients on average were all in Victoria. Photo: Peter Braig

Victorian hospitals are set to receive an estimated $800 million in Commonwealth funding under the most recent deal with the Turnbull government, but this is a fraction of what was once expected.

As new figures showed the state's hospitals were the most efficient in Australia, a spokeswoman for Victorian Health Minister Jill Hennessy said Victoria was set to receive about $800 million out of the $2.9 billion recently promised by the Commonwealth for state hospitals between 2017-18 and 2019-20.

But the spokeswoman said the funding, which was agreed to at a recent Council of Australian Governments meeting, was about $1.34 billion less than Victoria had been expected to receive under a health funding agreement with the former Labor government.

The hospitals that spent the most were in the ACT and Canberra.

Up until three weeks ago, the Victorian government had expected to lose about $2 billion over the next three years in Commonwealth funding for hospitals. It is now getting about $800 million of that back.

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The estimate came as new data showed Victorian hospitals including Frankston and Casey hospitals spent the least on patient care out of all of Australia's major public hospitals.

The National Health Performance Authority has measured the efficiency of individual hospitals by calculating the cost of delivering a notional "average" service at each hospital.

Treatment costs varied widely between hospitals. Photo: Nicolas Walker

It found that the four major metropolitan hospitals which spent the least on care for acute, admitted patients on average in 2013-14 were all in Victoria. The group also included Western and Dandenong hospitals.

The four that spent the most were in the ACT and Western Australia.

Frankston Hospital provided the cheapest treatment, with the average cost of a procedure there about $3100.

The report said treatment costs varied widely between hospitals, with some public hospitals spending nearly twice as much as others to deliver the same procedure to similar patients.

Tom Symondson, chief executive officer of the Victorian Healthcare Association, said Victorian hospitals had long been more efficient than those in other states, largely because Victoria had moved away from block funding to introducing an "activity-based funding" model in 1994.

He said the public hospitals funding agreement reached between federal, state and territory leaders at the Council of Australian Governments meeting this month provided a temporary reprieve from a previous plan to calculate additional funding based on inflation and population growth alone.

Yet hospitals were concerned about funding beyond 2020, with demand and health costs soaring, due to trends including a rise in patients with increasingly complex chronic diseases, and increased reports of mental health and family violence problems.

"Drug and alcohol abuse are also extremely strong drivers towards increased costs in certain areas because of the need to change the service model and respond to it," Mr Symodnson said.

In Victoria, Western Hospital in Footscray performed the best in terms of efficiency, with the average cost of a procedure falling 9 per cent from $3600 in 2011-12 to $3300 in 2013-14.

Maroondah Hospital in Ringwood East had the state's greatest efficiency loss, with the average cost of a procedure rising 14 per cent from $3100 in 2011-12 to $3500 in 2013-14, compared with NSW's Hornsby Ku-ring-gai, where the average cost surged 17 per cent over the same period – the biggest efficiency loss of any public hospital in Australia.

The National Health Performance Authority report said improved efficiencies did not necessarily translate into better patient outcomes and needed to be considered with other indicators of quality.

With Julia Medew