There is just one year left to save the NHS, doctors' leaders warn.
There is concern doctors will move abroad to work
Deficits and the end of record budget rises in 2008 mean the clock is ticking to get the NHS in order, the British Medical Association chairman said.
James Johnson said the public would not understand why cuts were being made once spending was up to the level of the top-spending European countries.
And he said questions may even be asked about how the health system is funded if the problems are not resolved.
But the government has maintained reforms are improving the NHS and the funding problems will be resolved this year.
Over recent years the NHS has been enjoying yearly budget rises of over 7%. Next year that is likely to return to a figure of slightly above inflation.
But Mr Johnson said the NHS was not currently in the position one might expect after years of extra investment.
An awful lot of trusts were in "quite dire financial straits", very big savings were having to be made and people were hearing about wards standing empty and operating theatres not being used, he said.
Mr Johnson also warned that poor workforce planning by the government meant some doctors may be forced to go abroad for work.
Last week a leaked Department of Health document predicted an excess of more than 3,000 consultants in the NHS by 2010/11 that the service could not afford to pay.
Mr Johnson said it was a "disastrous waste of public money" to train doctors only for them to go overseas.
"The whole situation demonstrates an appalling lack of workforce planning.
"It costs around £250,000 to train a doctor plus many more years of specialist training.
"If juniors cannot secure suitable jobs in the future within the NHS they may look overseas for employment. What a disastrous waste of public money."
And he suggested questions may be asked over whether the NHS continues to provide everything or if people needed to contribute towards their treatment - although this was not BMA policy.
"Don't assume there's anything automatic about the system we have at the moment continuing into perpetuity."
And he added he was very worried that the public health system was "going down the tube".
He said the recent reorganisation of local health trusts, which had seen the number halved to about 150, had seen many public health doctors lose their jobs.
"This will start to hit the drive to tackle obesity, smoking and sexually transmitted disease. All the sort of things we should be doing to prevent ill-health."
In a recent interview, Health Secretary Patricia Hewitt said government reforms were improving the health service and by the end of the financial year it would find itself in balance.
She said: "I am confident that the NHS will be back in balance by the end of this financial year, as we have promised."
A spokesman for the Department of Health said: "We are fully committed to a publicly-funded NHS which delivers healthcare according to clinical need, not ability to pay.
"The NHS budget has doubled since 1997 and will have tripled by 2008.
"This extra money has brought the fastest ever access to care and treatment, hundreds of new hospitals and GP surgeries, and 300,000 more staff.
"But it is a mistake to judge the future success of the NHS simply on the level of resources, and not on how effectively it uses those resources.
"System reform, greater productivity, and investment in prevention are the routes to a sustainable NHS for the long term - especially in the context of an ageing population and rapidly advancing medical science."