BENDIGO Health says it will close more than 20 beds and cut elective surgery by 600 cases because of federal funding cuts.

As the state and federal health ministers prepare to meet over the funding crisis, Bendigo Health became the latest state health service to come forward and blame the Federal Government over recent cuts to its budget.

The health service said a $2.9 million cut in its operating budget this financial year would increase emergency waiting times and cause a blowout in elective surgery waiting lists.

It announced elective surgeries would be slashed by 600 cases between Easter and June 30 and 24 beds would be closed - eight each in the surgical, medical and orthopaedic wards.

Around $100,000 would also be slashed from its mental health spending, by not replacing staff and reducing after-hours service.

Bendigo Health board chair Dr Michael Langdon and chief executive John Mulder said managing the cuts mid-year, without notice, was difficult, but the board had tried to minimise the impact on patients and had avoided redundancies.

"The reality is that these cuts will increase waiting times in our emergency department and result in a blowout of our elective surgery waiting list to over 1500, undoing much of the progress we have made in recent years," Mr Mulder said in a statement.

"Both Michael and I would like to apologise to our patients, their families and our staff for the impact that these cuts will have on your lives.

"This is no way to run a health system, and if we had been given reasonable notice and time to plan I am confident that we could have managed a far better outcome for all."

Mr Mulder said although redundancies had been avoided, staff would need to co-operate by taking annual leave at times that may not be ideal.

The Victorian Government and the Federal Government have continually blamed each other for hospital funding cuts, which have led to thousands of elective surgeries being put off and hundreds of beds closed across the state.

Last October, the Federal Government changed its health funding based on revised population data, which meant a $475 million cut in funding to Victoria over four years, including $107 million in this financial year.

The state budget is cutting $616 million of health spending between 2011-12 and and 2015-16.

Federal Health Minister Tanya Plibersek and her Victorian counterpart David Davis will meet on Friday to discuss the unfolding crisis.

Hospital bosses have issued memos to staff in recent weeks explaining the impact of the federal funding cuts, including 1300 elective surgery operations cancelled at Western, Sunshine and Williamstown hospitals.