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It could take more than seven years to get waiting lists back to pre-pandemic levels, Wales' public spending watchdog has warned.
In a report, Auditor General Adrian Crompton called on the Welsh government to do more to prevent harm to patients.
One 74-year-old suffering with severe back pain told BBC Wales how he has been on a waiting list for two years.
The Welsh government said it had set realistic targets to tackle the backlog.
The auditor general said: "Just as the NHS rose to the challenge of the pandemic, it will need to rise to the challenge of tackling a waiting list which has grown to huge proportions.
"Concerted action is going to be needed on many different fronts, and some long-standing challenges will need to be overcome."
Michael Assender, 74, from Cwmbran is living with severe back pain.
He spent £1,500 to get a scan from a private consultant that showed he had two slipped discs. He has been on a waiting list for surgery more than two years.
He said the surgery would cost him £15,000 pounds if he went privately, so he is living with the pain and hoping the waiting times will improve.
"At the moment I'm coping pretty well, taking pills for the pain and trying to stay active," Mr Assender said.
"But something that took me an half hour before now takes and hour."
"A lot of people out there are in a constant pain and I do pity them," he said, adding that knows people waiting for surgery who have become clinically depressed and even considered taking their own lives.
"It's a dire situation really."
According the auditor general's report, more than half those waiting may not even know what they are suffering from because they still have not had their first outpatient appointment.
That means their care cannot be effectively prioritised, the report stated.
Mr Crompton also called on Welsh Labour ministers to set "ambitious delivery targets," make long term capital investments in NHS infrastructure, create a "workforce plan" and manage "clinical risks and support for those waiting".
The Welsh government said: "Working with health boards, we have set ambitious but realistic targets to tackle the pandemic backlog for planned care.
"This is backed by significant extra long-term funding.
"Our recovery plan, published last month, already sets out our plans to address the five recommendations of this report, including how we will support patients while they wait and create a sustainable workforce with effective leadership."
The report also included a web tool which allows people to compare waits for different health boards and treatment types.
It showed a total of 701,418 patients waiting - though statisticians advise these are "patient pathways" and each patient may be on several lists, meaning the number of patients affected could be smaller.
The web tool showed that by March, 380,289 patients were waiting up to 26 weeks, with 168,502 waiting more than a year.
In addition, the report said a further 550,000 "potentially missing" referrals, higher than the Welsh government's own estimates of half a million, that could find their way back into the system and increase the risk of harm to patients.
Millions in backlog cash returned to government
The Welsh government made an extra £200m available to be spent by the end of the 2021/22 financial year, to tackle the waiting times backlog.
The NHS could not spend all of it and instead asked for £146m, which it was given.
However, of that, £12.8m was returned to the Welsh government as the NHS did not have the staff or space to spend it within the time frame.
The report said staff capacity, a lack of physical space and limited private capacity prevented health boards being able to spend the full amount and "serious barriers" need to be overcome to tackle ongoing waiting times, the report said.
Mr Crompton said: "Additional money has been made available and it is imperative that it is used to best effect to ensure there are equitable and targeted approaches that meet the planned care needs of the people of Wales."
Darren Hughes, director of the Welsh NHS Confederation, said "one-off, ring fenced injections of cash that are time limited do not allow the NHS to make necessary long-term investments in staff and capital required to meet the needs of the people of Wales".
He said workforce is the "number one limiting factor for NHS capacity", and recruiting staff was a "huge focus".
Welsh Conservatives health spokesman, Russell George, said people would not be confident the health service was functioning well.
He hoped the report would be a wake up call for the government.
"Labour need to get a grip on the NHS and stop breaking all the wrong records," Mr George said.
A Welsh government spokesman said: "Any funding which was returned by health boards was made available to support our Covid-19 response."