Over 45,000 NHS staff call in sick every day, which is lowering standards of patient care, according to the first national NHS Health and Wellbeing Review into staff habits.
NHS: Annual NHS sickness levels are 10.7 days a year per employee
The independent review found Improving the health and well-being of 1.4 million NHS staff could potentially save over half a billion pounds every year.
Annual NHS sickness levels are 10.7 days a year per employee - higher than the public sector average of 9.7 days and 50 per cent higher than the private sector average of 6.4 days.
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The NHS loses 10.3 million working days annually due to sickness absence alone, costing £1.7 billion per year.
"A reduction of a third would mean an extra 3.4 million working days a year, and annual direct cost savings of over half a billion pounds (£555 million)," the study said.
The interim report from the NHS Health and Wellbeing Review is published by occupational health expert Dr Steve Boorman.
He was asked by the Department of Health earlier this year to lead the review.
He found that while many NHS workers drink in moderation, more than one in five of them smokes, including heavy and casual smokers.
Only around half of NHS staff exercise on three days or more each week.
When it comes to staff sickness, the review found that those who worked more than eight hours a day had higher rates, as well as those who felt pressure to return to work.
Women were more likely to report in sick, alongside those who had worked for the NHS for a long time.
The review found that while NHS workers were more likely to pick up illness and infections through their work, this could not explain all of the higher rates of absence.
It said: "Nearly half of all NHS staff absence is accounted for by musculoskeletal disorders, and more than a quarter by stress, depression and anxiety."
It went on: "Most staff believe that their state of health affects patient care."
More than half of the 11,000-plus members of staff who contributed to the study said they felt more stressed than usual at the time of completing the survey.
Dr Boorman said: "While there are strong examples of good practice, staff health and well-being provision is patchy across the service.
"By putting staff health and well-being at the heart of how the NHS operates, we will not only help improve the working lives of 1.4 million people, but evidence suggests we will make significant savings and improve outcomes for patients."
More than 80 per cent of the 11,337 NHS staff who took part in the review's survey said their state of health affects the quality of the patient care they deliver.
NHS trusts that take health and well-being seriously perform constantly better on measures of quality, patient safety and efficiency, the study found.
Dr Boorman makes a set of recommendations, including offering staff counselling, health checks, stop-smoking help and healthy eating advice.
David Nicholson, the NHS' chief executive, said: "There are opportunities to improve both the quality of care and the productivity of NHS organisations by investing in the health of our staff.
"Other countries and industries already invest significantly in staff health and it is important that the NHS does the same.
"The ongoing NHS Health and Wellbeing review is crucial to achieving our ambition to develop world-class health and wellbeing services for all NHS staff."
Dame Carol Black, the Government's national director of health and work, said: "As the UK's largest employer by far, the NHS has shown a genuine commitment to improving the working lives of all staff.
"Dr Boorman's interim report presents a compelling case for the NHS to prioritise staff health and well-being, and illustrates the clear link between staff health and the quality of care they provide.
"I look forward to seeing the final report later this year."
Karen Jennings, head of health at Unison said: "We want to see best practice across the NHS and that means managers taking a responsible approach to the health and well-being of their staff.
"That means having good occupational health services which are patchy at the moment. It also means decent canteens with good nourishing food which is not deep fried or substituting provision by a fast food chain.
"That includes providing provision for night duty staff who have demands at home and need to have a proper nourishing healthy meal, not something deep fried or from a vending machine.
"It's about making sure people can get exercise as well. The whole health team must be included in this - from managers to clinicians, to psychiatrists, to cleaners and admin staff - we want them to stop smoking, we want them to think about their obesity levels in the same way we want the rest of society to do, and we want them to have their flu jabs."
David Cameron, the Conservative leader, said the figures were "very depressing" but reflected broader problems with public health in society as a whole.
He told GMTV: "They are very depressing figures, and they show that the NHS itself has to do better.
"But I think they also reflect a light on a problem that is society-wide, which is very bad public health outcomes in our country, whether it is smoking, diet, weight, alcohol, also the issue of sexually transmitted diseases, we have very bad public health outcomes in Britain."
He added: "We need to have an approach that says of course the NHS is absolutely vital in the nation's health, but we do need to protect those public health budgets, and make sure we are making progress on things like smoking, diet and obesity, all the things that will put pressure on the NHS itself in the future."
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