Increasing competition in the health service could lead to some hospital units closing, a leading doctor has warned.
Dr Mark Porter, chairman of the British Medical Association's consultants committee, said NHS hospitals are likely to lose services to private companies under the Government's reforms, which could leave them struggling.
As a result, many trusts will be "unable to cover the costs of entire departments", which could lead to their closure, or cuts being made in other ways such as reducing staff numbers.
The warning comes as an investigation for Pulse magazine suggests one in 10 GPs on the boards of new commissioning consortia also hold an executive-level position with a private firm.
GP consortia will be in charge of £80 million of NHS funding, with GPs making decisions on where to send patients for treatment, including to private companies.
The magazine said the finding exposed the "serious potential for conflict of interest in the Government's NHS reforms".
In a speech to the BMA's annual conference of hospital consultants, Dr Porter said the current "rationing" of services, together with reforms that will see NHS hospitals lose work to competitors, will result in less funding for NHS hospitals, but leaving them with fixed costs.
Hospital services considered to be of low value by commissioners, for example cataract surgery, were already being stopped or rationed in some areas.
"This is the true cost of shifting care from NHS hospitals into the community or to alternative providers," Dr Porter said.
"No savings are made for the NHS as a whole, but what is left behind can become a financially unviable remnant with a greater proportion of fixed costs."
Dr Porter said that the elements of the Health and Social Care Bill, currently going through parliament, that would increase competition would have "devastating consequences" in the long term but were being downplayed by the Government.
"It has been relentlessly presented to the public as a move to put NHS money into the hands of doctors to spend wisely for their patients.
"However, that is far from the whole truth. The truth is that this Bill aims to transform the NHS by making the development of a market in healthcare the most important priority in the NHS.
"And that truth is the reason the Government has found itself having to ignore the advice of dozens of organisations, all saying that this is the wrong thing to do.
"In order for competition to be meaningful, it must be possible and accepted that some organisations will fail.
"Simple to understand, but devastating in its effects upon a cash-limited health service forcibly opened up to commercial competition."
Pulse based its investigation on responses to a freedom of information request from 17 primary care trusts (PCTs).
The data covered 132 members of GP consortia.
Of these, 15 held board-level positions in private companies in addition to their roles on consortia.
Another 15 were either shareholders or advisers to private firms.
Dr Chaand Nagpaul, a negotiator with the BMA's GP committee, said: "There are real concerns about GPs with a senior-level interest in a private provider and we would suggest as far as possible to avoid such doctors sitting on commissioning boards because of perceived or actual conflict of interest."
It comes as researchers warned that the Government's health reforms will spell the end of the NHS and could lead to a US-style system.
The NHS will become an arena where private companies compete and the Government "finances but does not provide healthcare".
Professor Allyson Pollock, from the Barts and The London School of Medicine, and David Price, senior research fellow at its Centre for Health Sciences, said GP consortia will "not have a duty to provide a comprehensive range of services but only 'such services or facilities as it considers appropriate"'.
In response to Dr Porter's comments, a spokeswoman for the Department of Health said: "If we want to preserve the NHS for future generations, we must act now.
"We have protected the NHS and are ploughing in an extra £10.7 billion of funding.
"But the NHS must modernise in order to keep up with the increasing demand on services, an ageing population and rising costs of new drugs and treatments.
"The only way we can deliver productivity gains is by increasing clinical involvement.
"In addition, requiring all hospitals to become foundation trusts will help them become stronger and more productive.
"Our plans to modernise the NHS will release £1.7 billion savings every year, helping the NHS meet its efficiency target.
"They will also help put the NHS on a sustainable financial footing through reduced bureaucracy and much stronger incentives for quality and efficiency."Reuse content