Mr. Rudd and NSW Premier Kristina Keneally signed an inter-governmental agreement, rubber-stamping the Commonwealth's takeover of the state's hospital funding on Wednesday.

Prime Minister Kevin Rudd said that territories and states that have signed up for the federal government's health reforms will start seeing money flowing into their hospitals soon.

The agreement signed at Blacktown Hospital in Sydney's west, where 18 new beds will be added as a result of the agreement, Ms. Keneally said.

This will allow an additional 1000 extra elective surgery procedures to take place at the hospital.

These new beds will make a difference as the prime minister has stretched us with new targets for the performance of our emergency departments, Ms. Keneally told reporters.

Mr. Rudd denied the allegations that he was favoring NSW over other states or territories because of Ms. Keneally's support for the government's reforms.

You will see me at hospitals in Victoria and Queensland and elsewhere, where the mission statement is the same. He said.

We will add the 18 beds at Blacktown starting July 1 and will roll out in the following months to come.

This is what I want to see happening nationwide, Mr. Rudd told reporters.