Operations being cancelled because of lack of beds
Between 1998 and 1999 cancellations increased by 12% to a total of 56,000 at hospitals in England.
The problem was highlighted by the case of Mavis Skeet, whose throat cancer was found to be inoperable after exploratory surgery was postponed seven times. Earlier surgery may have saved her life.
The National Audit Office (NAO), which released a report on the crisis on Thursday, pinned the blame on a lack of beds and said hospitals were not doing enough to monitor resources available.
But the government said the increase in cancelled operations was outweighed by the increase in the number of patients being treated.
Cancellation rates vary widely in different areas of the country - 35% of hospitals cancel fewer than 1% of non-emergency operations, while a minority cancel more than 8% of their operations.
Emergency admissions taking up beds are the most commonly given reasons for cancellations and the situation is worst between January and March.
A total of 6m patients spent at least one night in hospital in 1998-99, of which two-thirds were emergency patients.
Massive variations
There are also massive variations between different hospitals in terms of bed occupancy and systems in place to deal with problems.
Among the most pressured hospitals are St Mary's, in London, which has a 99% bed occupancy rate throughout the year, and St Helens and Knowsley, in Merseyside, with a rate of 95%. Yet five hospitals had rates of lower than 60%.
"Failing to place patients promptly in the most appropriate facilities, cancelling their admission, or delaying their discharge from hospital can cause enormous frustration and distress."
He said very few hospitals had systems to provide up-to-date information on the availability of beds and operating theatres and a quarter of trusts were not discharging patients as early as they could.
He makes 20 recommendations for ways that failing hospitals could improve their performance and cut the number of cancellations, including:
He told the BBC: "The truth is your chance of having your operation cancelled in the first two years of this government was less than in the last two years of the previous government."
However, Mr Denham admitted more investment was needed to increase the capacity of the NHS.
But John Lister, from pressure group London Health Emergency, said: "This underlines the conclusion of the National Beds Inquiry that the last government and this one following in its foot steps have allowed bed reduction to get to such a level that the NHS cannot sustain the service."
Donna Covey, Director, Association of Community Health Councils for England and Wales, said: "In some hospitals the problem can only be resolved through additional capacity, but the reports recommendations should help improve patient care for others."
And Liberal Democrat health spokesman Nick Harvey said: "This report confirms that the NHS is stretched to the limits. Routine cancellation of operations on the day and emergency patients being kept waiting is unacceptable.
"Due to shortages of beds and staff, sick people are being sent home when they should be in hospital being treated."