If there is one aspect of the patient experience the NHS is known for, it is the need to wait. And if there is one consistent policy theme that has driven changes in the service since Labour came to power in 1997, it has been a concerted effort to reduce the numbers of patients waiting and, more importantly, the length of time they spend doing it.

Labour's policy instrument of choice on waiting lists has been centrally set targets designed to cut maximum waiting times for inpatient and outpatient treatment. But setting targets was not a New Labour innovation.

Despite Enoch Powell's warning in the 1960s that getting waiting lists down was an "activity about as hopeful as filling a sieve", in the 1980s and 1990s Conservative administrations actually succeeded in reducing the numbers waiting for treatment for two or more years by introducing maximum waiting times as part of the so-called patient's charter. In 1993 they introduced a measure of the time spent waiting to see a consultant and set a maximum here, too.

But by 1997 the Conservatives appeared to have given up hope of achieving further gains. Their maximum waiting time guarantee remained in place, but there was no sign that they intended to reduce queues any further.

So Labour inherited maximum waiting times of 18 months for inpatients and six months for outpatients, and an inpatient list of more than 1 million. But despite Labour's 1997 election pledge-card promise to cut waiting lists by 100,000, this was not achieved until 2003.

The real achievement has come in reductions in waiting times: maximum times now stand at around six months, with 50% of patients admitted to hospital having waited less than seven and a half weeks - half the time patients waited in 1997.

But for every benefit, there is a cost. There is no official estimate of the direct financial cost of reducing waiting times; unofficially, most people in the NHS presume this to have been substantial. What has become painfully clear over the last six months is that the pressure to meet targets at the expense of balancing the books has contributed to the biggest overspends in the history of the health service.

Unremitting political pressure on the NHS to meet the one-size-fits-all waiting times targets has been a blessing and a curse.

Tough sanctions have undoubtedly made Labour's targets work where the Conservatives faltered. Reducing waiting times has been the top priority for trust managers. When push came to shove, and a hospital faced a decision to either admit more patients (and increase its costs) to meet its four-hour maximum casualty wait or balance its books, the former almost always won.

It is no surprise that trust managers took the view, as the government's public spending watchdog the Audit Commission noted, "that central government targets are in direct competition with the achievement of financial balance."

The Department of Health encouraged this attitude by allowing trusts more time to break even if a deficit might "seriously threaten the achievement of national performance targets".

Reports published by the Audit Commission this year on a record number of 26 NHS organisations that were failing in their financial duties in many cases confirm this invidious trade-off.

Not all hospitals that have hit their targets have done so by getting into debt, but hospitals began their race to achieve targets from different starting points. A handful had no patients waiting longer than six months a decade ago, while others had a mountain to climb.

As the NHS heads towards the latest of its targets - a maximum wait of just 18 weeks from GP referral to a bed in hospital by 2008 - one way of ameliorating the impact of targets on finances would be to relax the target timetable for selected hospitals. This would allow trusts in serious deficit some breathing space to recover their financial position.

Maybe it is time to reconsider whether the marginal costs of hitting the target are worth the marginal benefits. The combined outpatient and inpatient median waiting times now stand at 14 weeks, suggesting that upwards of 70% of patients are already being admitted within the 18-week target.

In other words, how much do we really value having no patient - whatever their condition - waiting no longer than four and a half months from seeing their GP to being treated?

Perhaps the NHS should review its priorities and turn its attention to reducing inequalities in access to healthcare. We know, for example, that access to - and use of - healthcare generally is not equitably distributed across population groups or geographically according to need. Tackling this aspect of access is undoubtedly difficult but goes to the heart of the reason for the existence of the NHS.

· Professor John Appleby is the chief economist at healthcare thinktank the King's Fund