The Rudd government has stated that under the federal health reform plan, the number of operations at public hospitals would remain capped.

The office of Health Minister Nicola Roxon has confirmed that for planning purpose, the states will continue to set the number of services at each local hospital network, which has come as a blow to the hopes of doctors and health reform advocates.

Local hospitals will be able to meet new national targets for waiting times as the new form of cap, described as an 'activity target will be higher.

States fearing that an uncapped model of hospital services would break their budgets, the states may be delighted by the concession.

Doctors have however warned that patients will continue to suffer unacceptable delays for surgery and emergency care if the funding model remains capped.

A spokeswoman for Roxon said, ''For planning purposes, local hospital networks will work with states to determine the broad range and number of services each network will provide in a given period."

According to Australian Medical Association president Andrew Pesce, capping services risked continuing the blame game.