The NHS chief executive said: That does mean reducing the number of beds and the number of staff. He expressed his fears despite Prime Minister David Cameron's pledge that frontline services will be safe despite the disruption. Fewer beds will mean longer waiting times for patients and GP's will be unwilling to refer patients for operations if there are no beds for them.
Ministers are ending Labour's health targets which means the 18-week maximum wait for in-hospital treatment will no longer be guaranteed.
Waits in A&E will also increase as staff phone round looking for beds in other hospitals if they have none free.
NHS trusts are already drafting plans to scrap beds and even entire wards.
Two mental health wards are to go at the Lancashire NHS Trust, with the loss of 36 beds, and the Mid Yorks Trust is to lose elderly medical care beds. At the North West London NHS Trust 95 beds are earmarked for closure, another 33 will go at London's Newham Hospital.
Sir David told the Commons Health Committee a quarter of everything the NHS does is now up for grabs as he reorganises the health service.
But he said more patients with long-term conditions would be treated in their own homes or care homes rather than in hospital.
He added: Every penny saved must be reinvested in front line services and improving quality.
Committee member Labour's Grahame Morris added: Cuts will lead to fewer beds and even the closure of hospitals. This must impact on patients. They will face longer waits for operations and in A&E. The Royal College of Nursing predict 26,841 doctors and nurses will go over the next five years.
Its an urban myth that the NHS is being protected, said RCN chief Dr Peter Carter. And the British Medical Association told The People: If beds are cut its hard to see how patient care will not be affected.
But earlier this year the think tank Reform said 32,000 of the nations 160,000 hospital beds should be scrapped to save money. And it predicted London, the North East and North West were on course to lose a quarter of their beds.