Former health secretary Alan Milburn has proposed a new system of personalised NHS budgets, which people with chronic illnesses could use to buy social care.
The MP for Darlington, a close ally of Tony Blair, told a conference in Washington yesterday that NHS credits could improve care, empower patients and drive down costs.
"The idea would be to give such patients a choice between receiving a package of care from the NHS as they do now or instead having their own budget - an NHS Credit - they could control directly," Mr Milburn said.
It would be open to those with chronic diseases, "since their needs are predictable, their relationship with the NHS long-term but their condition largely relies on what they do, not on what the health service does".
But although it could ultimately merge with the direct payment scheme, which currently allows about 25,000 to decide their own spending on health and social care, he said the NHS credits would initially be focused on those with the most complex long-term needs.
The MP, who was health secretary between 1999 and 2003, said personal budgets would never work for emergency treatment, but stressed they were the logical next step after payment by results and patient choice.
"There is a difference between money following patients and patients controlling money. With the one the patient consumes, with the other the patient controls. Patient choice is the start of a journey - not its destination," he said.
The move is likely to meet with opposition from the left of the Labour party who argue that some people do not have the capacity to manage a budget themselves and would lose out. There are also concerns that prices will rise without the NHS' bulk buying power.
But Mr Milburn said professional assistance would be available to help people manage their money, and the oldest and the poorest would also get extra support. The whole scheme would be tax-funded and he insisted the evidence showed costs would go down.
"Providers would have strong incentives to offer patients cost-effective high-quality services," he said, adding that the scheme could also create markets for services such as physiotherapy for arthritic patients which are currently underprovided.
"This is a progressive proposal with a core progressive purpose.It is time to fundamentally change the distribution of power in health care - to put the patient in control," Mr Milburn said.
Another of his ideas - all of which will feed into the policy reviews launched by Mr Blair last week to determine the next ten year's of Labour strategy - included elected primary care trusts (PCT), which Mr Milburn said would be "genuinely devolutionary".
He also suggested the existing expert patient programme, where people are taught to manage their own illness, should be more ambitions and increase its target from 100,000 patients by 2012 to at least one million.