The NHS will suffer from a £30 billion spending gap if changes are not made to the way services are delivered, NHS England claims.
The body has called for “open and honest debate” about the future of the NHS.
More people are living longer with more complex conditions and new technology is needed to meet rising demand from patients, according to a publication released today by NHS England.
However the organisation made clear that the NHS will not begin to charge for “core services”.
Chief executive of the NHS, Sir David Nicholson said: “The NHS was set up to provide high quality care for patients, free at the point of need. The NHS has stayed true to this aim and to do so in the future, we must embrace new ways of working
“We are facing demands, opportunities and investment unimaginable when the NHS was created in 1948. New data is available now to highlight where we get it right – and as importantly, where we get it wrong. We are setting all this out today – including the funding gap – to encourage the public and doctors and politicians to have an honest and realistic debate about how they want their local NHS to be shaped.”
Sir David believes that the establishment of GP-led commissioning will enable the NHS to find local answers to the funding challenge.
NHS Confederation chief executive Mike Farrar said: "The NHS is under unprecedented pressure and is experiencing unprecedented demand. Addressing these issues requires unprecedented thinking. But it does not mean we should abandon everything from the past. The traditional values of care and compassion must be at the heart of the NHS of the present and the future.
"NHS England is right to call for an honest and realistic debate between NHS staff, the public and politicians about what needs to change. When that debate has been had, it is crucial that those in charge of the NHS make the changes a reality."
The publication was released following a National Audit Office (NAO) report which revealed that the reforms cost the government at least £1.1 billion.
At least £2 billion worth of administration costs were saved as a result of the reforms, which caused 10,094 redundancies, with an average payoff of £43,095.
NHS England’s analysis showed that the £30 billion spending gap will increase if action is not taken soon.
Sir David said: “This is on top of the £20bn of efficiency savings already being met. This gap cannot be solved from the public purse but by freeing up NHS services and staff from old style practices and buildings. ”
Chris Ham, chief executive of The King’s Fund said: “Fundamental change is required to respond to the needs of an ageing population, changing burden of disease and rising patient expectations.
“The government’s recent NHS reforms failed to address these challenges. This time politicians and policy-makers must deliver - this means having the courage to transform services, rather than making further bureaucratic and structural changes.”