Allowing staff and patients to design healthcare services might save the NHS £20bn by 2014, according to the National Endowment for Science, Technology and the Arts (NESTA).
It says the health service must “move away from centrally-driven directives and place the challenge and responsibility in the hands of the public”.
The report adds that allowing communities to run their own campaigns has reduced illnesses and boosted healthy living at a fraction of the cost of Government-run campaigns.
Meanwhile, says NESTA chief executive Jonathan Kestenbaum: “The NHS does not have to choose between saving money and saving lives, or between cutting costs and reforming itself.
“It is possible to develop cheaper, more effective patient-centred services and approaches to public behaviour change but only by adopting radical new ways of innovating within the NHS.”
He says that for the NHS to be successful, patients and clinicians will need to be put in control. The report is backed by shadow health minister Andrew Lansley and Tim Kelsey, of Dr Foster Intelligence.