Norman Lamb's proposal is outlined in 'The NHS: a liberal blueprint', which sets out his vision for how the NHS can cope in the current economic climate.
Among other recommendations aimed at using resources more effectively is the idea that GP pay should be linked to improving patients' health.
He also suggests dramatically cutting NHS bureaucracy and changing the financial incentives in the NHS to promote the prevention of ill-health.
Mr Lamb said: ‘The NHS is a much-loved institution but it is facing an unprecedented financial challenge over the next few years.
‘These proposals set out a liberal approach to the NHS which can drastically reduce costs, improve the quality of care and give people a say in how their local services are run.'