A meeting of the health board on Tuesday heard that an "unprecedented" reduction in costs of about £100m may be needed over the next three years.
Plans to shift more resources to caring for people in their communities rather than in hospital are to be accelerated.
David Alston, the board's chairman, for NHS Highland to continue operating as it has been was "unsustainable".
On the plans to make savings, he told BBC Alba: "It is about there being less acute beds in acute hospitals because that those are not a good place for people to be and there needs to be a shift of resource from acute hospitals to primary care in the community.
"Each time we do a survey about a quarter of the people in an acute hospital don't need to be there."
Bosses at NHS Highland have said that Scottish government plans on health care offer "significant opportunities" to invest more in community care and also in reducing hospital bed blocking.
The potential scale of savings were set out in a report by NHS Highland's director of finance.
This year the health board is trying to make almost £29m of savings.
Next year the savings target more than doubles with the health authority having to cut another £50m from its budget to break even.
The report said: "Across the course of the next three financial years (2017-2020) the savings requirement is likely to be in the region of £100m.
"This is an unprecedented scale of savings requirement and it is clear that a 'more of the same' approach is not going to deliver a balanced plan and therefore the model of care needs to be changed."
NHS Highland has said that its current models of care delivered across its area needs to change quickly.