Price everything properly. Every NHS treatment should be properly priced - from a GP appointment to major surgery - and the patient given a bill. This would not be paid in cash at the time, but it would let patients know how much they were costing the system, discourage waste and make people appreciate the care they receive rather more.

Use paramedics. The NHS is staffed mainly by highly qualified professionals such as doctors, nurses, dentists and pharmacists who are "unionised" members of professional bodies such as the British Medical Association.

These organisations have done a terrific job on behalf of their members, whose wages have soared in many cases. These ill-advised agreements cannot be reversed because the British never accept pay cuts. But more work could be done by part-qualified individuals who would cost much less.

Reinvent the pension scheme. The NHS pension scheme is unsustainable and should be closed. The terms and benefits for members should be revised substantially. Given the huge pay increases of recent times, the future burden of the final-salary scheme is sure to lead to crisis unless things change. Medical workers should face reality just like those in the private sector.

Introduce incentive payments. Staff should be rewarded according to performance, as happens in most other walks of life. Bonuses should be given for those who actually deliver - nothing for those who fail.

Make private health costs tax deductible. This will encourage those who can afford it to go private and take pressure off NHS facilities. It will also help encourage growth in private care, so providing competition to the NHS and forcing it to improve.

Do regional pay deals. Staff should not earn the same in different parts of the country. Rates of pay should reflect the local cost of accommodation and other expenses.

Change the law on medical negligence. The growth in the numbers and size of legal claims is undermining morale, wasting resources and costing the taxpayer too much. The legal profession should be prevented from exploiting the state in this area.

Scrap 'Connecting for Health'. This mega information technology scheme may end up costing £30bn or more. It is wildly over-ambitious and bound to fail.

Let doctors and nurses manage. They are highly intelligent, educated people who understand clinical issues better than the bureaucrats ever will. They should be taught the economics of health care and encouraged to run their own organisations - and the politicians and civil servants should keep out.

Introduce stricter NHS registers. Just as voters must be on the electoral roll, so patients must prove they are qualifying citizens to prevent "health tourists" coming here to exploit our lax system.

Manage locally but buy nationally. Wherever possible, hospitals, surgeries and clinics should control their own destinies to give staff a sense of ownership and loyalty. But purchasing of drugs and other supplies should continue on a national basis to take advantage of economies of scale.

Exclude 'lifestyle' treatments. The NHS should not carry out cosmetic surgery, sex-change operations or IVF treatments nor prescribe drugs such as Viagra. Patients should take out insurance or fund such treatments themselves.

A centrally-managed organisation with 1.3m staff can never be truly efficient or productive. Over time, we must accept that the 1946 Bevanite model of the NHS has to be replaced by an insurance-based scheme, which works in virtually every other advanced economy. But it will take very brave politicians to carry out the task.

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