"This is a huge, much-needed boost to hospital funding, and a great catch-up for hospitals and emergency departments around the nation," Dr Capolingua said.
"New equipment and upgraded emergency departments are absolutely necessary.
"But unfortunately it's not much use having new equipment if you've still got patients in pain, waiting in corridors on stretchers because there aren't enough beds to go around."
The AMA has repeatedly called on COAG to commit at least $3 billion to funding 3,750 new public hospital beds and the staff and infrastructure to service them.
"We need thousands more beds in Australia's hospitals, or the emergency department blockages are not going to go away," Dr Capolingua said.
"This is an urgent problem. It needs an immediate solution.
"The Government has shown this week that it is capable of making a big short-term commitment to the nation's public health system - now let's see that commitment extend to ensuring every patient is able to get a bed in a ward when he or she needs it."