Action is needed to stop NHS waste and make health services equitable, says England's Chief Medical Officer.
Sir Liam wants an end to "unacceptable variations" in provision
In his annual report, Sir Liam Donaldson says there are wide-ranging variations in provision across the country which are wasting NHS money.
He says both under-use and over-use of treatments are rife and proposes tighter checks and controls, including tariffs for improper prescribing.
He is also calling for guidelines on which treatments to stop providing.
He said the National Institute for Health and Clinical Excellence should be asked to issue guidance to the NHS on disinvestment, away from interventions that were no longer effective or appropriate or that did not provide value for money.
He said some of the variation in clinical practice was on account of the preferences and habits of doctors and hospitals rather than on the needs of the patients.
For example, he said that some hospitals around the country have continued to carry out hysterectomies to treat women with excessive menstrual bleeding even though guidelines recommend that effective drugs may be used instead.
SIR LIAM'S KEY POINTS
Cut waste and inequity - ensure services are fair, cost effective and evidence-based
Pandemic flu - establish a national committee to discuss ethics of pandemic flu care
Public health - Protect investment in public health from being used to plug other NHS financial deficits
Kernicterus - More checks for this serious disease of the brain related to jaundice in newborn babies
Patient safety - Lessons can be learned from the aviation industry
While hysterectomy rates have fallen by as much as 64% in north and central London, they have dropped by only 15% in Northumberland, Tyne and Wear.
Sir Liam said: "In my view, this level of variation in clinical practice is not acceptable."
"If hysterectomy in England could be reduced to an appropriate level across the country we would avoid nearly 6,000 operations and save more than £15 million annually."
Prescribing patterns, tonsillectomy rates among children and treatment of people with coronary heart disease also vary unacceptably across the country, he said.
He proposed a number of measures to make sure services were more equitable and cost effective.
Incentives could be given to encourage appropriate prescribing and penalties inflicted for inappropriate prescribing, for example.
Sir Liam said: "Maybe we should be looking at incentives. Possibly we should adjust tariffs so that greater loading is given for effective treatments and greater penalties are given for useless and ineffective treatments."
He said computers in hospitals and GP surgeries could also be programmed to block a doctor from prescribing a treatment that had little or no evidence behind it.
The NHS could also learn a great deal from the aviation industry and adopt standard operating procedures - set protocols on exactly how to treat conditions. This would not only encourage equitable care but also help ensure better patient safety, he said.
He acknowledged that some doctors might view this as an infringement on their professional autonomy, but said the majority would be open to the changes, adding that many of the Royal Colleges were looking at standard operating procedures.
"We need to be less fearful of change and more fearful of status quo," he said.
Sir Liam also warned that public health campaign budgets for areas like smoking and obesity should not be "raided" to pay for NHS deficits.
Sir Liam also unveiled plans to set up a committee to discuss the ethical questions surrounding pandemic flu, such as who should get priority for the vaccine and on what basis critical care beds would be allocated.
Sir Liam said: "I am setting down a challenge to commissioners of health services - to reaffirm their commitment to the principle of equity and ensure their patients receive a fair service and the care they need."
Liberal Democrat Shadow Health Secretary, Steve Webb MP said: "This report shows that health inequalities still run deeply through our society. "People still face an unfair postcode lottery in accessing health services across the country, which bears little relation to need.
"Health needs around the country would be best met by democratic community bodies giving local people a direct say in the services they need."
Conservative Shadow Health Secretary Andrew Lansley said: "This report is a big wake-up call for the government.
"We know there are initiatives that work and would improve health outcomes, but are not being rolled out because of financial problems in other parts of the NHS. Ring-fenced budgets must be allocated, so that the budget is not subordinated to external pressures."
Joe Korner of The Stroke Association welcomed Sir Liam's report.
He said: "Stroke services are patchy across the country and it is vital that these are improved to save lives and improve outcomes for the estimated 150,000 people that have a stroke in the UK each year."
A spokeswoman for the British Heart Foundation said: "We must make sure treatments are available to people who need them. Treatment must be based on need rather than postcode, and commissioning should consistently consider socio economic status and ethnicity."