The group in charge in buying healthcare for most people in Devon has admitted it is "financially challenged" just days after its counterpart in Cornwall confessed their finances were a "big mess."
Northern, Eastern and Western Devon Clinical Commissioning Group (NEW Devon CCG) said there are difficult choices ahead as "small" funding increases had failed to keep pace with rocketing demand and costs.
Chief officer Rebecca Harriott said the financial situation in the NHS meant that there were tough times ahead.
"When we look at the growth in demand from an ageing population and expectations on the NHS to use new drugs and technologies, it is clear that the size of the challenge cannot be solved by any one part of the NHS or public sector working alone," she said.
"We are developing a strategy with our partners to address the issues and while we recognise that the issue is primarily one of resources, safe, high quality services are and always will be our first priority.
"Working more closely with local councils, the use of new technology and medicines and greater focus on individuals all offer opportunities to improve services and make efficiencies.
"These will address the issue but ultimately will only go so far so it's important people understand that there may also be some difficult choices ahead."
A number of health organisations in Devon have predicted a multi-million pound deficit despite hitting most Department of Health targets.
NEW Devon CCG was identified as "financially challenged" by NHS England, Monitor and the NHS Trust Development Authority due to its share of the deficit, amounting to £14.7million.
Ms Harriott said traditional organisational boundaries were put to one side to tackle to issues.
"Already clinicians from NHS organisations in the area have met to discuss how services could be provided differently in future and local providers are working with us," she said.
The clinical commissioning groups took over ordering and buying healthcare for local patients from the now defunct primary care trusts last April under sweeping and highly controversial reforms of the health service
Angela Pedder, chief executive of the Royal Devon and Exeter Hospital, earlier this year revealed mounting deficits for the next three years parallel to predictions of dwindling income.
Earlier this week, Dr Colin Philip, chairman of NHS Kernow, the Cornish CCG, issued a warning over finances saying "we have received small amounts of growth funding it is true that this is not keeping pace with rising costs and rising demand."
