Market-based reform in the NHS is being crushed by central direction. The answer is to put money in the hands of patients and to empower clinicians, says a new report.

Why the NHS is the Sick Man of Europe, by James Gubb of think tank Civitas, draws together recent studies on efficiency, quality and equity and claims they show that NHS performance has "flailed badly over the past 10 years, despite record increases in funding".

It is time for the NHS to learn from Europe, particularly the Netherlands, says the report. It adds that in the Netherlands, "mandatory health insurance, plentiful choice and extensive top-ups for the very sick and those who cannot afford it harnesses the incentives and efficiency mechanisms of competition in a way that acts for the public good".

Mr Gubb claims that with the Dutch healthcare system "being hailed as possibly the most streamlined, equitable and competitive system in the world, it is time for the NHS to follow".

The report points to new government clinical initiatives issued "without even consulting doctors", and "sinister tactics" from the Department of Health, "such as adjusting tariff top-ups to strip hospitals of specialist services it deems are no longer necessary".