Taking the pressure off public hospitals will be the subject of an independent review agreed by health ministers.

Federal Health Minister Mark Butler met with his state and territory counterparts in Brisbane on Friday, agreeing to former health bureaucrats Rosemary Huxtable and Michael Walsh starting work on a review of the five-year public hospital funding agreement.

The funding and delivery of public hospital services across the country is governed by the National Health Reform Agreement, which runs to 2025.

The review will look at the impact of factors such as COVID-19 on the demand for hospital services and the flow-on effects.

As well, it will examine the performance of small rural and small regional hospitals, possible long-term reforms and any unintended consequences such as cost-shifting, perverse incentives or other inefficiencies that impact on patient outcomes.

The reviewers have also been asked to consider whether the agreement itself remains fit-for-purpose given changes in the health, disability and aged care sectors.

An interim report is due in August with a final report going to health ministers in December.