The Morrison government has cut a deal with states and territories over sharing the estimated $1 billion in health costs in dealing with the coronavirus outbreak.

The announcement comes amid news that three Sydney hospitals have been directly affected as the virus spreads further in Australia.

Prime Minister Scott Morrison said it was a standalone arrangement, with $100 million put down upfront, and not linked to any other funding arrangements.

Under the deal, announced on Friday, the federal government will stump up $500 million to fight the deadly COVID-19 epidemic. The states will pay the rest.

“This is about dealing with the coronavirus, and making sure that the states, as they are leaning forward and responding we are leaning forward and responding with them,” Mr Morrison said.

“It could be more, but we at least have to enter into these arrangements having some sense of the scale of what we’re dealing with here.”

Hospital hazard

In Sydney, dozens of staff at Ryde Hospital were put in self-isolation and 56 patients were identified as close or casual contacts of a confirmed COVID-19 case.

At Liverpool Hospital, in the Sydney’s west, 23 staff and five patients have been identified as potential close contacts of a confirmed case.

A health worker at Canterbury Hospital has been diagnosed with the virus after returning from Iran.

The diagnoses suggest Sydney’s coronavirus epicentre is in the city’s north-west.

Epping High School, which is near the affected hospitals, closed on Friday and ordered more than 1100 teenage students to self-quarantine after a year 11 boy tested positive for the virus.

NSW chief medical officer Dr Kerry Chant said there were plans to make sure hospitals were adequately staffed.

“We have several mitigation strategies in place to backfill any absent staff with other health workers to ensure continuity of service in our hospitals,” she said.

Australia’s chief medical officer, Professor Brendan Murphy, had earlier warned the worst-case scenario for Australia was “millions of people being infected over a period of several weeks”.

Professor Murphy remains confident that the country’s public health systems are well prepared if widespread outbreaks happen.

However, fears for the safety of front-line health workers responding to the outbreak have prompted union calls for dedicated clinics to be introduced.

Australia now has 53 confirmed cases of coronavirus, and two elderly people have died.

Worldwide, the virus has spread to 80 countries, with 95,000 confirmed cases and 3250 deaths.

Mr Morrison and Health Minister Greg Hunt announce details of the deal with the states. Photo: AAP

Authorities warn more cases are inevitable. They are now framing the campaign against the virus as a war that won’t be over quickly.

The dawning realisation that the outbreak will be drawn out has affected supplies of key household items.

Coles, Woolworths and Aldi have enforced limits on toilet paper purchases after panic buying.

Woolworths is also limiting the sale of large bags of rice, and hand sanitiser.

Further afield, four more Australians have been caught up in yet another cruise ship emergency, this time off the coast of California.

Test kits are being dropped onto the Grand Princess, where dozens of people have shown flu-like symptoms. A passenger on a recent cruise died.

The Department of Foreign Affairs and Trade said consular officials were in San Francisco ready to support the four.

Australia has already lost one person to a cruise ship outbreak, and others are still in hospital.

– with AAP