Department of Health officials are drawing up a system to target health inequality funding towards the most deprived individuals in primary care trusts' areas, health secretary Alan Johnson has revealed.
Mr Johnson told members of the Commons health committee the DH was in the early stages of working out whether it would be possible to set up "person based allocations", with funding "firmly tied down to individuals".
Epidemiologist Sir Michael Marmot is to consider how this approach will be developed, as part of his post-2010 strategic review of health in-equalities. His work will include defining "systems, levers and metrics" to deliver action on health inequalities across government.
Mr Johnson said: "I'm told by our people that it is worth doing. The data is more sophisticated now - they've got the technology so it's worth having a bash. It may come to nothing but we're looking at it."
DH officials have already signalled that they want to include health inequalities work in the GP quality and outcomes framework.
Mr Johnson also said it would be a "counsel of despair" to give up on reducing the health inequalities gap and simply focus on those with poorer health.
He defended the record of the NHS when challenged over whether poorer performing PCTs were spending badly.
He said: "I don't have a list of PCTs that are heroes and a list that are villains. They're all trying their best and are all motivated to tackle health inequalities... There are areas where they haven't got partnership right, where in the local strategic partnership they aren't playing the active role they should be, but they all want to tackle these issues."
Ministers have just unveiled packages worth nearly£20m to boost work on health inequalities.
Dawn Primarolo announced an extra£11m for 83 areas to implement "local health improvement" and community initiatives and£2.5m for local government work on health inequalities. And care services minister Phil Hope unveiled£5.5m funding for 18 projects to help people from marginalised communities cope with diabetes, cancer and cardiovascular disease.
The£5.5m is for the second wave of the "pacesetters" initiative, set up in 2007 to improve the health and well-being of people in deprived areas.
Wave one projects included British Sign Language care plans and increased breast screening for women with learning disabilities.
The Commons health committee has launched an inquiry into top-up payments, following national cancer director Mike Richards' review of co-payments. Written submissions should be received by 11 December.