Mr Ashdown's speech to party members in London was timed to coincide with a Commons debate on health called by his colleagues.
With the NHS in London pounds 44m in debt, the crisis had reached proportions which demanded immediate action, he said. The Liberal Democrats would invest an extra pounds 550m in the health service, he added.
Mr Ashdown called for a six-month review of facilities in the NHS, which should be completed in time for this year's Budget. There should be an annual "state of the health service" debate in Parliament and a regional planning system should be set up, he said.
The health service had become a lottery for many families who needed it, he added.
"The closures of beds and the axing of services is not being carried out in any co-ordinated strategic way, but through the chaotic resolution of hundreds of local financial crises," he said and added that the King's Fund, a health institute set up 100 years ago today, should be put in charge of the review of the service.
Meanwhile, in the Commons the Liberal Democrats' health spokesman, Simon Hughes, called for the reinstatement of free dental and eye checks and the immediate scrapping of local NHS pay bargaining.
The public could no longer feel safe in the hands of the health service, he said and added that the Liberal Democrats were the only party to have made a firm pledge to spend more money on health.
However, Gerald Malone, the Minister for Health, said the Government had made "huge progress" in reducing waiting lists. "We believe the NHS is affordable in its current form and needs continuing investment," he said.Reuse content