The NHS clinical watchdog has today begun a review to weed out the treatments and procedures which are out of date but still being used.
The National Institute for Health and Clinical Excellence (Nice) will look at the treatment options offered to patients and how drugs are used, including whether doctors are following the guidance it has issued in the past.
Last year, the chief medical officer noted that patients having their tonsils out unnecessarily, or those having a hysterectomy where other treatments were possible, were costing the NHS £21 million a year.
Doctors will also be reminded of previous Nice guidance - for example, patients with end stage renal failure should be offered treatment in their home or in a hospital.
Home care costs half as much as hospital care, but in 2002, just two per cent of such patients were treated in this way.
"This is not about cutting services that benefit patients," stressed health minister Andy Burnham.
"New drugs and treatments are continually emerging and trusts have to make difficult decisions about how to invest funding. I believe this important new work will show how the NHS can free up millions of pounds from obsolete or ineffective treatments."
The NHS is currently struggling with more than £500 million of debt, and primary care trusts (PCTs) are finding it increasingly difficult to balance competing priorities.
The problems were highlighted in recent months by the debate about the breast cancer drug, Herceptin, which some PCTs said they could not afford to provide despite its proven benefits.
"Nice already advises the NHS on when it should invest in new drugs and treatments that work well for patients," said the watchdog's chief executive, Andrew Dillon.
"It's common sense for us to also advise the NHS on when it is appropriate to stop using treatments that don't benefit patients or do not represent good value for money where there are better alternatives available."
Sam Everington, the deputy chairman of the British Medical Association (BMA), said doctors would welcome any new guidance to help them find the best treatment for their patients.
But he warned: "We would not want to see a blanket ban imposed on certain treatments since there may be occasions where individual patients, with specific health needs, would necessitate a particular intervention."
Dr Everington added: "Above all, any decision must be primarily based on clinical evidence and not simply an exercise in cost-cutting."