Tony Blair has backed hospital managers sacking hundreds of staff, saying it would lead ultimately to a stronger NHS.
At a crisis summit in Downing Street, the Prime Minister met executives from trusts making cuts, including University Hospital of North Staffordshire which is losing 1,000 jobs.
The Prime Minister said it was essential to tackle the overspending which had led to hospital deficits.
"Out of the process of change will emerge a stronger, more sustainable NHS," he said.
The summit was called after hospitals announced more than 7,000 job cuts in recent weeks. The total NHS deficit for this year is expected
to be #623 million. University Hospital of North Staffordshire, which runs the City General and Royal Infirmary hospitals in Stoke, is axing posts to reduce a #17 million deficit.
Managers from Royal Shrews-bury and Telford NHS Trust, which runs two hospitals in Shropshire and is cutting 211 jobs, also took part in the summit.
Mr Blair told them: "This is the time to have confidence that a change is necessary and has to be implemented if we want to see the NHS put on a sustainable footing in the long term. These changes have to be done."
He stressed the "so-called staff redundancies" would still leave 300,000 more people working in the health service than a decade ago.
Other Midland hospitals have also announced dramatic cuts.
Sandwell and West Birmingham Trust, which runs City, Sandwell and Rowley Regis hospitals, is expected to announce 800 job cuts today after ending the financial year #6 million in the red.
Worcestershire Royal Hospital has announced more than 700 job cuts and New Cross Hospital and the Wolverhampton Eye Infirmary are to lose 300 jobs.
Mid Staffordshire General Hospitals NHS Trust, which runs hospitals in Cannock and Stafford, is to axe more than 150 jobs in a bid to make savings of #10 million next year.
Good Hope Hospital in Sutton Coldfield will close two wards, lose 50 beds and an operating theatre.
Pat Chipping, medical director of University Hospital of North Staffordshire NHS Trust, said the cuts had hit staff morale.
She said: "It's a troubled organisation at the moment. People have found it difficult to come to terms with the fact that until this year we were in financial balance. There is a struggle to cope with that.
"They know there were areas where there were inefficiencies. They know theatres don't work terribly effectively and don't get every patient through as rapidly as we should."
But Conservatives said the NHS cash crisis was a result of Government mismanagement.
Shadow Health Secretary Andrew Lansley said: "They should give GPs real budgets and an ability to manage patients in communities or hospitals, according to the patients' needs."