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Health care costs in Australia are growing faster than the population, inflation and the economy. There are more of us, we are living longer, and when we get sick, more is being done for us. So, how to fund world-class health care into the future is a big and growing challenge for Australian policymakers. In this presentation to the Victorian Comprehensive Cancer Centre’s ‘Monday Lunch Live’ forum, the Grattan Institute’s Health Program Director, Stephen Duckett, describes the size of the problem and proposes a framework for solutions. In particular, given that the current Commonwealth-state hospital funding agreement expires on 1 July 2020, he considers what post-2020 hospital funding should look like.