Private finance initiative schemes damage hospital services, turning the NHS into "an emergency service" because of a reduction in beds, researchers have claimed.
The existing Royal Infirmary in Edinburgh
The allegations were made after an examination of preparations for the private finance initiative (PFI) in Lothian, Scotland - but the analysts predict the pattern would be repeated across the country.
They said Lothian had not reached targets it set itself for cutting inpatient admissions and shortening hospital stays - but the hospital trust has strongly refuted their claims.
And Scottish Labour leader Jack McConnell rounded on critics of the flagship project, accusing them of peddling "false arguments".
The targets for Lothian were set in 1996 to prepare NHS services in the area for the opening of the multi million pound PFI hospital in Edinburgh
The aim was to cut the number of beds available for patient care across by 24% in readiness for the new hospital.
The reduction was supposed to be offset by providing more efficient care, including shorter hospital stays, earlier discharge from hospital and more care provided in the community.
But researchers from Glasgow Royal Infirmary and University College London say this has not been achieved, resulting in a steeper decline in the number of beds available and rates of admission to Lothian hospitals over the last five years compared to the rest of the Scotland.
And they warn the situation is being repeated in all areas where a PFI hospital is being built, affecting patient care.
But Mr McConnell said: "Those academics who try and create a false argument about the way that the hospital was originally financed are very wrong indeed.
"The doctors and nurses in the Lothian health service have worked very hard to improve the health service in the last few years, and they deserve our support, not that sort of criticism and attack.
"There are people being treated there getting hip replacements in three or four days, a situation that would take taken three or four weeks four or five years ago."
The researchers looked at projected and actual trends in bed capacity and inpatient and day case admissions in Lothian between 1995 to 1996 and 2000 to 2001, and compared them to figures for the rest of Scotland.
They found 81% of the planned bed cuts had been achieved. But the projected 21% increase in inpatient and day case admissions to all acute specialties had only reached 0.3%.
Inpatient admissions to surgical specialties were projected to rise by 8% but actual admissions fell by 13% due to severe capacity constraints.
Hospital stays only reduced slightly across all acute specialties, and in surgical specialties, they rose.
People are going untreated
Allyson Pollock, researcher
The proportion of delayed discharges was higher than the Scottish average.
Lothian Health Board currently has a £95m deficit, largely due to the costs of the PFI, say the researchers.
They warn further cuts to hospital and community services may be needed to allow the board to pay off its debt.
Writing in the British Medical Journal, Professor Allyson Pollock, of the School of Public Policy at University College London, and Matthew Dunnigan of Glasgow Royal Infirmary, said: "Our analysis shows evidence of reduced service delivery across Lothian and its associated PFI development compared with other Scottish hospitals."
Professor Pollock warned that fewer beds meant a reduction in planned operations such as hip replacements and coronary artery bypass.
"People are going untreated. They are coming in much sicker.
"They will have to go without care until they get to the right sickness level, or go private."
She added: "This is happening across the country. The NHS begins to only operate as an emergency service."
She said the current situation was "very predictable" because of the expense of PFI, but local health bodies went ahead with the plans because the government said it was "the only show in town".
Dr Charles Swainson, medical director of Lothian University Hospitals Acute Trust said the researchers claims were "completely untrue" and based on inaccurate figures.
He said: "The fact is that we have treated all of the patients that have presented for surgery and for all other treatment at our hospitals.
"We have actually achieved the waiting time guarantees agreed in Scotland that no-one waits more than nine months."
Dr Swainson added: "The researchers' argument is completely spurious."
He called on them to prove patients were not getting treatment when they needed it.
A spokesman for the Department of Health said: "This is total nonsense, based on a complete misunderstanding of the way the NHS works."
"Decisions about bed numbers are made before any decisions about how building a new hospital should be
funded. The two things have no relationship."
He said bed numbers in both public ally and privately funded hospitals had been cut in the past because it was thought beds could be used more efficiently and more people cared for outside hospital.
But he said the process could not continue, and bed numbers had increased in the last two years, the first time since 1971.