Reducing hospital stays is right for some patientsThe NHS in England must end the "hospital-or-bust" attitude to medical care, says the body representing health service trusts.
At least one in four patients would be better off being treated by NHS staff at home, figures suggest.
2012 will be a key year for the NHS as it tries to make £20bn in efficiency savings by 2015, according to the head of the NHS Confederation, Mike Farrar.
Ministers say modernising the NHS will safeguard its future.
Mr Farrar said: "Hospitals play a vital role but we do rely on them for some services which 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."
Mr Farrar said the required changes included treating frail people in their homes, and minimising hospital stays wherever possible.
Politicians and NHS leaders must show the public how these changes could improve care, rather than focusing on fears over the closure of hospital services, he added.
"Many of our hospitals know that the patients that they are treating in their beds on any given day could be treated better - with better outcomes for them and their families - if they were treated outside of hospitals in community or primary care," he told BBC Radio 4's Today programme.
'Place of default'Mr Farrar told Today that people had become used to "the hospital being a place of default" and that primary and community healthcare services had sometimes been under-funded.
Mike Farrar, leader of the NHS Confederation: "It's much better for a good number of patients to be cared for in their homes"
But he said even where clinicians knew that better care could be provided outside of hospitals, and politicians accepted this privately, the public debate had not helped individuals understand that.
"We need the politicians and the clinicians to stand together with one voice to explain these changes," he said.
"I think the time has come for real political courage on all parties to stand up and say 'if the evidence is clear that my constituents will get better outcomes because they travel a bit further' or indeed that 'if we can release the costs of these beds to make services available in your own homes' - then that's the right thing to do."
Commenting on the new year message from the NHS Confederation, Health Minister Simon Burns said in a statement: "Modernising the NHS will both safeguard the future of our health service, and will deliver a world-class service that puts patients at the heart of everything it does."
The chair of the independent NHS Future Forum, Steve Field, said: "The old hospital-based system has to develop into a more preventative, community-based system."
And shadow health minister Liz Kendall added there would be "difficult decisions" that had to made.
"The NHS Confederation is right to say this will require real leadership from the NHS and politicians."
But she questioned whether the government would be able to provide this as it was embarking on a major reorganisation of NHS structures.
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