That blame game Labor promised to end Kevin Rudd, 2007: "The Commonwealth blaming the states and vice versa doesn't help the problem when you're sick," he told a news conference. It's time to end the blame game between Canberra and the states on health and hospitals. Julia Gillard, 2013: JULIA Gillard has threatened to abandon her own landmark health reforms before the federal election, escalating a row with the conservative states as they seek more funding for public hospitals from the commonwealth. The Prime Minister ... yesterday warned the states she was prepared to scrap the two-year-old funding agreement if they continued to blame her government for cuts to services. Instead, the Gillard government has already moved to "go around" the states, rearrange their budgets and deal directly with hospitals - starting with a $107 million "rescue package" for Victorian hospitals announced yesterday. The package effectively returned health funds that were cut from the Victorian budget as part of the commonwealth's $1.6 billion "recalibration" of funding based on new population data... The conservative premiers were last night undeterred by the Prime Minister's threats, vowing to keep up the campaign, as constitutional experts warned that Ms Gillard's direct funding model might not stand up to a High Court challenge. So much for five years of "health reform" by Rudd and Gillard. In the end, Gillard, desperate for more of the cash she's squandered, tried to pinch some back from state health funding. And now this almighty brawl. By caving in to Victoria and restoring $107 million of the money cut from the state's health budget on the strength of outdated population figures, Health Minister Tanya Plibersek has put the commonwealth in the firing line to return $1.6bn across four years to the states and territories. Strictly speaking, the commonwealth was right in docking the states because Australian Bureau of Statistics data showed projected population increases on which the original funding was based had not materialised. Disrupting the states" budget processes, however, was always going to cause a political storm... The backflip is also a problem for Ms Gillard in that the agreement she signed two years ago forbids direct transfer of payments - despite it being Labor's preferred position. The move could even be subject to a High Court challenge.