NHS leaders believe that at least 25% of patients in hospital beds could be looked after by NHS staff at home, says NHS Confederation chief executive Mike Farrar, who has called for an end to the "outdated hospital-or-bust model of care."

The NHS needs to shift resources into community-based services, early intervention and self-care, says Mr Farrar. However, he also warns of a potential loss of confidence in the Service unless political and healthcare leaders can make a compelling case to the public for changes in service delivery.

Leaders "need to be honest about the issues, bold about the solutions and decisive in taking action," he says. They must offer the public a compelling vision of how services can be better after the changes, avoiding the traps of focusing exclusively on the closure of some hospital services and failing to explain how the public would benefit overall.

There has been "a lot of talk about changing services, but 2012 must be the year we convert talk into action," says Mr Farrar, adding: "it feels like the focus is on everything but the thing that would make the most difference."

"Hospitals play a vital role, but we do rely on them for some services that could be provided elsewhere. We should be concentrating on reducing hospital stays where this is right for patients, shifting resources into community services, raising standards of general practice and promoting early intervention and self-care. There is a value-for-money argument for doing this, but it is not just about money and the public need to be told that - this is about building an NHS for the future," he says.

In particular, he points out that this shift would mean better care for frail patients, as they would have fewer crises, shorter hospital stays when they need them and more time in the comfort and safety of their homes. "There would be opportunities to improve safety through consolidation of specialist services. There would be major potential to deliver better value for money and keep the NHS on a sustainable footing - we all know that quality of care will fall victim to a financial crisis," he stresses.

Mr Farrar is calling for strong political and clinical leadership in order to help bring about change, pointing out that politicians have failed to support the NHS even when the case for change has been clear. And while the voice of clinicians will be more powerful than ever under the new system, they must not be set up to fail through lack of support, he warns.

How health services are paid for also needs to change, he says; currently, perverse incentives often mean it may not make financial sense to provide care out of hospital, even though this may be best for patients. And the NHS has to listen to the public and must be prepared to change course when it is getting something wrong, says Mr Farrar.