Scots Labour leader Johann Lamont challenged the First Minister on the Government's health record after Auditor General Caroline Gardner issued the warning in evidence to a Holyrood committee.
At First Ministers Questions, Ms Lamont claimed the NHS had cut more than 2000 nurses, was struggling with a £1 billion repairs backlog and faced a £200 million real-terms budget cut.
Ms Lamont also criticised the reductions in college budgets and accused the First Minister of delaying a further £3bn of cuts until after the independence referendum in 2014.
She said: "When will the First Minister face up to the reality and be straight with the people of Scotland?
"This is about understanding what is happening in the real world to ordinary people now. Will he come and join the rest of us in the real world?"
Mr Salmond said: "There are more people working in the National Health Service in Scotland than when the SNP took office. On every single judgment of output, on waiting lists, patient care, Scotland's National Health Service is performing in outstanding fashion."
The First Minister defended his Government's performance, saying a recent Audit Scotland report "pointed out that Scotland's health service is well managed in terms of its finances".
In a swipe at Labour's decision to review the affordability of Government giveaways, including free university tuition and free prescriptions, the First Minister added: "Johann Lamont is the fourth Labour leader I've faced across this chamber.
"If she pursues this line she will certainly not be the last Labour leader I face across this chamber."