First Minister Carwyn Jones has warned of "tough decisions" ahead for the NHS in Wales.
Speaking to the Welsh NHS Confederation conference in Cardiff, he said all will be done to protect frontline services in next week's draft budget.
His comments follow a bitter row in the assembly over whether the NHS budget should be protected.
The draft budget for 2011-12 is due to be published next Wednesday.
Speaking at Thursday's conference, the first minister said: "There are tough decisions ahead, and these will inevitably impact on staff.
"We have to work with them to find a way through, because staff know better than anyone else how to save money - so that we can deliver the same or better quality services."
Mr Jones also insisted that the assembly government was not about to jettison universal benefits, such as free prescriptions.
He added: "The NHS was born in Wales, and is the pride of Wales.
"I'm proud that the NHS in Wales has remained true to the principles of its founder, Aneurin Bevan, with services provided free at the point of need."
Mr Jones stressed the central role the health service played in his government's planning.
"Next week, the Welsh Assembly Government will publish its draft budget for the next four years," he said.
"I can't reveal the detail of that yet, of course, but let me make this commitment to you: the NHS is, and always will be a priority for the assembly government."
Mr Jones said the health service was already working more efficiently than in previous years, and the streamlining of health boards down to 10 across Wales was delivering even greater savings.
"The fact is that increased efficiency and better public services go hand-in-hand," he added.
"A shorter length of stay is better for the patient, as well as being more cost-effective to the NHS."
On Wednesday, the health minister, Edwina Hart rejected calls from the Conservatives in the assembly to ring-fence spending on the NHS in Wales.
In a debate led by the Tory's health spokesman, Andrew RT Davies, argued that cuts in NHS spending would lead to a health 'time-bomb' for the future.
But Mrs Hart accused the Tories of hypocrisy, for not saying where they would cut services elsewhere in order to protect the health budget.
The UK Treasury says Wales' overall budget will fall by £400m next year in cash terms - that is, without taking inflation into account.
'Cause for concern'
Welsh ministers argue that in real terms the cut will be nearer to £900m.
Meanwhile, Welsh Liberal Democrats say they are concerned about the number of NHS patients waiting to start treatment.
Veronica German, Welsh Liberal Democrat health spokesperson, said: "It is unacceptable that 13,536 people are waiting more than seven months for treatment in the Welsh NHS, longer than the Labour-Plaid government-set targets.
"What gives more cause for concern is the number of people waiting over 10 months to begin their treatment.
"This figure has shot up from May to September with 1,774 people waiting for an unacceptably long time. What is happening to our health service?"