Three-year plans of 12 elite foundation hospitals serving the Yorkshire region show they plan to make hundreds of millions in savings as revenue increases only slightly or in some cases plunges by as much as nine per cent.
Ministers claim the NHS will get real-terms rises in coming years but the reality of demand and inflationary pressures means the health service faces the heaviest cuts in its 60 years.
Hospitals face further pressures as more of their services are provided in the community but they are already dealing with cuts in payments for emergency care and next year for routine treatment, leaving staff with the task of maintaining standards with less money.
Key measures to reduce costs include reducing the time patients spend in hospital which health chiefs in York estimate could save 5m by 2012.
In Sheffield, orthopaedic patients are being given physiotherapy seven days a week instead of only on weekdays so they can leave hospital more quickly.
At Scunthorpe hospital, changes surgical techniques and pre and post-operative care are allowing bowel surgery patients to recover more quickly and leave hospital in five days, down from 14.
Another focus will be on reducing demand for emergency care which has risen inexorably as the population ages and more people live with chronic illnesses.
Much of this will involve better co-ordination of health and social care in the community to avoid the need for hospital treatment.
Many hospitals are taking over community services for the first time in a move designed to help them better organise services. Managers in Rotherham claim as much as a quarter of their income could come from work delivered outside hospital by 2012.
But with heavy cuts expected in social care expenditure by local authorities, real doubts remain about whether improvements in community care are likely.
The changes mean hospitals will have fewer wards and beds and their assets will be used more. Operating theatres will be run for longer while some centres plan to open clinics into the evenings.
But the bulk of costs are accounted for by staff. All hospitals are planning measures to cut premium cost bank and agency staff as well as overtime. In Doncaster, more efficient rostering of relief nurses and a reduction in locum doctors is saving 3.6m a year.
Nevertheless, the scale of savings required means all hospitals will shed jobs initially through cutting or freezing posts, delaying recruitment or employing cheaper, less skilled staff.
Some 56 staff have left the Northern Lincolnshire and Goole trust this year under a voluntary redundancy and early retirement programme.
Most say they hope to avoid forced redundancies but some have already taken place including 37 back office staff at Rotherham Hospital.
A two-year pay freeze announced by the Government will help curb pay costs but many staff are entitled to increments each year under nationally-agreed contracts.
Some trusts are believed to be considering breaking the agreement but are delaying amid signs the Government could put the payments on hold.
A freeze would save Sheffield Children's Hospital 1.4m in 2011-12 but it says "there are currently no plans to freeze incremental pay for staff".
REGIONAL TRUSTS SEEK EFFICIENCIES
York's finance director Andrew Bertram said: "We are, and continue to be, paid for the work we do, but we do have to work with our commissioners to ensure a level of service that is affordable to the wider health community."
Chris Sharratt, chief executive of Sheffield Children's Hospital, said a full review of services was under way to find efficiencies, adding: "We cannot be specific at this stage about how the trust budget or staffing levels may be affected."
A Doncaster and Bassetlaw spokesman said: "We are aware of the need to explore every opportunity for cost savings and maximising efficiency. We are looking at retirements, retraining or redeployment before redundancies."