During a debate between clinicians and health experts at the think tank's London headquarters, Mr Appleby said there would always be trusts where quality drops because of financial pressure.
Mr Appleby was arguing 'for' the motion that 'this house believes the NHS cannot cut costs without substantially damaging the quality of health care,' as part of a discussion on the effects of the financial squeeze.
‘The NHS is poor at measuring quality, and what goes "unobserved" can be at risk when the focus is on what gets measured - savings,' said Mr Appleby.
It is widely accepted that the NHS in England needs to find productivity improvements valued at £20bn over the next five years as investment slows and demand grows. A panel of experts assembled by the King's Fund discussed whether the funding shortfall could be overcome by productivity alone or whether cuts were inevitable.
Honest conversation about the scale of the problems facing the NHS had stalled as the election approached, the panel agreed.
Professor Paul Corrigan, a former health adviser to Tony Blair, argued that the NHS could find such efficiencies without compromising quality.
More proactive medicine and self-care could reduce demand in primary care, said Professor Corrigan, who described general practice as ‘a GP waiting in a room for people to come in who think they are sick'.
A tariff should also be developed to incentivise hospitals to look after a patient for the whole year, including keeping them out of hospital, said Professor Corrigan.
Professor Steve Field, also speaking at the event, said GPs needed to ‘grow up' and start to look at how they can work in federations and integrate with secondary care colleagues without extra resources.