More than half of West Midlands hospital trusts are failing to balance their books, the NHS watchdog warned today.
Patients will suffer unless financial management improves, according to the Healthcare Commission, which published its annual league table of health services.
But there was also praise for hospitals in the region, with many receiving top marks.
The Commission grades health trusts on criteria such as waiting times, cleanliness and the quality of medical treatment. Many hospitals received top grades, including Birmingham Children's, Heartlands, the Queen Elizabeth and the Royal Orthopaedic, all in Birmingham, as well as Russells Hall Hospital in Dudley and Walsgrave Hospital in Coventry.
They were awarded the maximum three stars, which means they achieved "high performance" in 2004/05.
How did Midland hospitals fare? Click on the link below to view the ratings:
No West Midland hospitals received the lowest rating of zero stars.
But nine of the 16 hospital trusts in the West Midlands failed to meet the target for financial management, which was to stay within their budgets throughout the year.
The Commission also graded other health trusts including ambulance services and primary care trusts, which are responsible for GPs.
Of the 67 health trusts in the West Midlands, 20 went over budget.
Across the country, trusts went #500 million into the red last year, the Commission revealed.
Anna Walker, chief executive of the Healthcare Commission, said: "We consider this very serious, and an issue that needs to be addressed, because patient care will suffer if financial management isn't got right by the trusts."
The increasing deficits were a result of changes in the way the NHS was run, she said.
These included new contracts for consultants, and the introduction of payment by results for GPs.
"The proper financial management is really important, because it will affect quality of care if it is not put right."
She added: "There is a limit on the money provided by Parliament for the NHS.
"If a trust doesn't manage its budget then the money has to come from somewhere."
Birmingham hospitals with deficits included Good Hope, in Sutton Coldfield, which was defended by the local MP, Andrew Mitchell (Con Sutton Coldfield).
He said: "It is very worrying that this situation has developed. But it is caused by reforms which were imposed on hospitals without enough thought about how they would be paid for.
"The Healthcare Commission has warned that patient care could be affected, so we need action now to sort this problem out."
Some Midland trusts received just one star, which means there are "some concerns" about the service they offered patients.
These include Good Hope Hospital in Sutton Coldfield, New Cross in Wolverhampton, Manor Hospital in Walsall, Queen's Hospital in Burton and George Eliot Hospital near Nuneaton.
A rating of one star was also received by the trusts responsible for Warwick and Stratford Hospitals, Worcestershire Royal Hospital in Worcester and Alexandra Hospital in Redditch, and Stafford and Cannock Hospitals.
Heartlands Hospital in Birmingham received a boost, as it passed an inspection for cleanliness.