Doctors have warned that Scotland needs to increase spending on the NHS by up to £3bn a year to bring it into line with other similar EU countries.
BMA Scotland has set out 20 proposals aimed at "shaping the future of safe, sustainable hospital-based healthcare".
It blames a lack of investment for missed targets, staff shortages and low morale.
The Scottish government said it would "fully consider" the issues raised in the report.
BMA Scotland said the country must follow others such as Austria and Belgium which spend 10% of GDP on health.
That compares to 8.4% in Scotland and would have meant an extra £2.6bn in funding for 2017/18 alone.
The body's consultant committee chairman Simon Barker said current problems across the system could not be allowed to go on indefinitely "without increasing risk and adverse consequences for patients".
He was speaking as the doctors' organisation set out its 20 proposals in three key areas:
- a collaborative and sustainably-funded structure
- a supportive culture
- and a valued workforce
Mr Barker said: "Things have become progressively worse for those delivering care.
"They are being asked to work in services with neither enough staff, nor enough money.
"Yet they are constantly being harried to deliver care within unrealistic timescales, in the face of growing demand, and in fear of making mistakes for which they will be blamed - rather than the wider shortfalls of the system.
"The result is morale is pretty much rock bottom - in particular amongst senior doctors. The refrain 'work smarter' is threadbare in a system that struggles to provide basic services from one day to the next."
'Has to change'
He added: "For the future of our hospitals and the people who depend on them, this simply has to change.
"If it doesn't, we can no longer expect hospitals to provide the kind of comprehensive care we have always relied on the them for.
"If we can fix the funding, we have then put forward a raft of proposals to secure a brighter future for the care provided in our hospitals."
The Scottish government has defended its record on health spending.
In a statement it said: "Like the BMA Scotland, we believe that partnership between the public, health boards, stakeholders and government is the key to quality health care, and particularly in delivering specialist services that meet the physical and mental health needs of patients.
"This year the Scottish government is investing more than £14bn in health and care services, maintaining our investment in public services despite UK government austerity. This report raises a number of important issues and we will fully consider them as we continue to work to support our NHS and care staff to provide vital care."