The think tank believes the health secretary should not be able to choose whether reconfigurations referred by local authority overview and scrutiny committees should be sent to the independent reconfiguration panel.
It says councillors should instead be able to refer matters to the panel directly. The IPPR also believes advice produced by the panel should go back to the local NHS - and not the health secretary - for a final decision.
The present system 'undermines the credibility and the perceived fairness of local decisions' and its recommendations tackle this, the IPPR said in a report, The Future Hospital: the politics of change.
IPPR head of public services Richard Brooks said: 'Decisions about which hospital wards and services are affected should not involve ministers in Whitehall.
'At the moment, vital hospital changes are being opposed because the public believe they are politically motivated or driven by cost-cutting.
'We need the government, in partnership with clinicians, to set the policy framework, but ministers should have no say in the final decision.'
The report said changes affecting a wider area should be considered by a joint overview and scrutiny committee drawn from affected councils.
But NHS Confederation chief executive Dr Gill Morgan said: 'Given the small number of decisions referred by the secretary of state to the reconfiguration panel, the proposed change would undoubtedly increase the workload and potentially create delays unless its capacity was significantly increased.' Consultation should improve to avoid referrals in the first place, she said.
A Department of Health spokesman said: 'Ministers are only involved where local authority overview and scrutiny committees believe changes have not been fully consulted on or are not in the best interests of patients.
'Less than one in 10 local consultations results in a referral to the secretary of state.'
The report also called for a 'national strategy for reconfiguration', which should 'answer the criticisms and concerns stakeholders have expressed'.
The IPPR looked at two anonymous reconfigurations. It said financial difficulties 'led potentially sympathetic stakeholders to distrust the process of change'.
The process of deciding on the configuration of services 'was not very transparent' and councillors and MPs 'were not kept informed of local developments'. It added MPs in particular were 'inconsistent' and often accepted the principle of change but opposed it locally.