Many patients are getting poorer care as the NHS financial crisis is deepening, experts have warned.
The King's Fund health charity said NHS trusts are forecasting an end-of-year net deficit of about £2.3 billion.
There are increasing concerns about quality of care as health bosses are being forced to tighten the purse strings, according to the body's latest quarterly monitoring report.
More than half of NHS trust finance directors (53%) believe quality of care in their local area has worsened in the past year.
Theregular survey carried out for the report found two-thirds of trusts and 9 in 10 acute hospitals are forecasting a deficit at the end of 2015/16.
Overall, The King's Fund has estimated NHS trusts' deficit will stand at a staggering £2.3 billion.
The estimate, based on survey responses from 83 trusts across England, comes as central bodies are imposing stringent financial controls in a bid to reduce the deficit, the charity said.
John Appleby, chief economist at The King's Fund, said it was "touch and go" whether the Department of Health will be able to balance its books at the end of the year.
The report also highlights dips in NHS performance, including increased waiting times and large numbers of people waiting for planned procedures.
In December, 8.2% of patients were waiting more than 18 weeks after being referred for a procedure - the first time the 18-week target has been missed since it was introduced in April 2012, the authors said.
They added that the total waiting list for planned hospital admissions in December was estimated at 3.5 million patients - equivalent to the populations of Greater Manchester, Bristol and Southampton combined.
In the three months to the end of December 2015, 9% of patients waited longer than four hours in A&E - the worst quarterly performance since 2003, the report states.
At the end of December, more than 5,000 patients were waiting in hospital beds to be discharged from hospital into the community.
Bed-blocking - which occurs when patients are medically fit to leave but care has not yet been organised in the community - is a big problem for NHS hospitals.
"These findings are further evidence that the NHS is facing a huge financial challenge," said Mr Appleby.
"Even with the additional funding recently provided by the Treasury and a big switch from capital to revenue spending, it is touch and go whether the Department of Health will be able to balance its budget at the end of the year.
"At the same time, performance is deteriorating with key targets being missed with increasing regularity and increasing concerns being raised about the quality of patient care. This is shaping up to be a make-or-break year for the NHS."
Dr Mark Porter, chairman of the British Medical Association council, added: "It is clear that the Government is managing the NHS into deficit by cutting resources while expecting service improvements at a time of rising demand."
"Asking for greater efficiency from the most efficient health service in the developed world, regardless of the mounting deficits that hobble frontline patient care, amounts to politically driven mismanagement."
Cathy Warwick, chief executive of the Royal College of Midwives, said: "These results are a real concern. The Government is asking the NHS to make enormous savings in a very short space of time and we know that the impact of this is being felt in maternity services and the wider NHS.
"This report must generate a discussion about the Government's pursuit of savings over safe staffing, it seems, at the expense of patient care and about the underfunding of the NHS as a whole."
Labour's shadow health secretary Heidi Alexander said: "These findings are further proof that Jeremy Hunt has lost complete control of the NHS's finances."
She added: "Jeremy Hunt needs to come clean with the public about the scale of the financial crisis in the NHS and what it means for patient care."
Health Minister Alistair Burt said: "There should never be a choice between providing safe care - our top priority - and balancing the books, which is why we're investing £10 billion to fund the NHS's own plan for the future, including nearly £4 billion next year.
"Despite being busy the NHS continues to perform well - last year the service performed 1.6 million more operations and treated 2,100 more people every day within the four hour A&E target compared to 2010."