Speaking at the annual NHS medical directors' conference in London, Mr Nicholson described the approaching funding crisis as ‘absolutely unprecedented' and ‘10 times bigger' than the financial challenges of 2004 and 2005, when trusts had to overcome £1bn in deficits.
‘There is some evidence but it is sketchy about whether this can be done on a system-wide basis. We can't find anywhere else in the world where it has been done in this way. So it's a big challenge.'
The NHS Confederation estimates that efficiency savings of up to £20bn will need to be found between 2011 and 2014, just to keep up with zero growth.
Earlier DoH director of improvement and efficiency, Jim Easton, admitted evidence that driving up quality could save the NHS's finances was 'at best mixed' and ‘small-scale'.