The government has only a year to save the NHS and maintain its status as a free service funded by taxation, the leader of Britain's 120,000 doctors warned yesterday.
James Johnson, chairman of the British Medical Association, said the period of record growth in the health budget was due to come to an end next year. If Patricia Hewitt, the health secretary, did not correct the "idiocy" of the competitive market she created in the NHS, there would be overwhelming pressure for fundamental reform.
Mr Johnson said: "If we get to the end of 2008 and we still cannot balance the books, ministers will want to look carefully at what they do next."
That could mean restricting the range of services offered on the NHS, asking patients to contribute towards the cost, or slowing down the speed of treatment.
"The BMA believes in a tax-funded system, but other countries have [other] systems. When Alan Milburn talked about the NHS being in the last chance saloon, he was not talking out of his hat. If we spend 9% of national income on the NHS and we can't make it work, people will ask: do we need something fundamentally different?"
Mr Johnson was delivering a wide-ranging critique of the government's handling of the NHS at a briefing for journalists. He said: "The message this year is we have one year to save the NHS. The increase in money is due to stop next year. We have had five years of unprecedented funding and real terms growth of 7% a year. You might think we would be in clover, but we are not."
A lot of hospital trusts were in "dire financial straits". They were having to shut wards and leave operating theatres idle. Some were in "the worst of all worlds" - paying doctors and nurses to do nothing because local primary care trusts had run out of money to pay for treatments.
Mr Johnson said: "We can't help but point out the idiocy of the situation." When a hospital was told to go slow, it was left paying about 90% of the outgoings it had when running at full pelt. The trust was not allowed to negotiate to charge the NHS for the marginal cost of taking on extra activity.
"Under Ms Hewitt's system of payment by results, it had to charge the full price laid down in a national tariff.
"The NHS's financial systems are not nearly sophisticated enough. As a concept, payment by results was too radical to have been brought so quickly and too crude to operate." It was no wonder that ministers were starting to panic, he added.
Mr Johnson said workforce planning had broken down in the NHS. Last week a leaked Department of Health document showed it was forecasting a surplus of 3,200 consultants by 2010.
"It costs around £250,000 to train a doctor, plus many more years of specialist training." It was "nonsensical" to train up doctors only to lose them to jobs abroad because there were none in the UK.
He said half the public health directors in England had lost their jobs in a reorganisation last year.
The Department of Health said: "This is unnecessary doom-mongering. Waiting lists are at a record low ... NHS funding post-2008 has not yet been set by the Treasury."
