Over the summer no media report on the state of the NHS was complete without mention of the postcode lottery in treatments, either through challenges to primary care trust exceptional case panels or the perceived ethics of the current rules on top-ups.

The Richards review into top-ups may help with one of these issues, but exceptional case panel decision-making is a story that is likely to run and run. The danger with this is in the continuing damage it could cause to the reputation of the health service and PCTs in particular. This begs the question, do we need to consider more radical policy solutions, or should those in favour of localism - all political parties, for example - simply make a stronger and more robust defence of the approach?

Exception panels originally emerged out of commissioners' wish to exclude certain types of treatment - particularly where there is evidence that the treatment is of limited effectiveness. Their remit has grown to include applications for high-cost drugs, in particular those not approved by the National Institute for Health and Clinical Excellence and other treatments not covered in the national tariff or other contractual arrangements.

This evolution has required a broadening of the expertise and capacity of those sitting on panels. Panels ideally also require a carefully developed ethical and decision framework and a well-designed process but the extent to which these has been developed is variable.

The question is whether, despite this evolution, investment and development, this is the best way of making decisions about complex questions of rare and expensive treatments rather than their simpler, original role of considering exceptions to blanket bans on a small number of treatments.

The simplest alternative is to try to improve the system as it stands, both through the speeding up of NICE decision-making and the work of the National Prescribing Council which, in the next six months, is likely to produce revised guidance on the structure, formation and process for exceptional case panels.

These two initiatives may help provide a well-designed process, improving decision-making, but it won't change the fact that decisions will differ from area to area. This will not end the variation that so concerns the public.

Another option is to create a regional or national approach to exceptional cases. The attraction of this is that it would reduce variation and allow the development and concentration of expertise and would have sufficient work to justify professional ethical and economics advice.

However, while this might solve the problem of variation, the additional bureaucracy, inevitable delay and creation of a body that would become a focus for lobbying and legal challenge makes this option look unattractive. It also removes responsibility further away from those who should be taking decisions.

Who should be taking them? A key principle is that where possible, decisions about patients should be taken as close to them as possible, with PCTs focused on the health of the local population and clinicians dealing with individual patients.

PCTs as commissioners should therefore be concerned with outcomes, and except where care is unsafe or seriously departs from the evidence, they should not be involved in the minutiae of care design. Problems arise when the cost of drugs is not included in the tariff: either because they are explicitly excluded or because the tariff lags behind the pace of clinical progress.

It is worth pointing out, however, that there is no particular reason to expect the tariff to match the costs of providing care exactly. Payment systems are designed to pass much of the risks to providers on the basis that they have the expertise to manage it most appropriately. The tariff should be adjusted to recognise the risk that high-cost drugs may be required. Where risk is hard to attribute to a particular bit of the tariff, or may not be part of the tariff system, providers or commissioning cancer networks could be given a single fund to assist in managing the risks of having a small number of patients requiring high-cost treatment. In short, clinicians would be given the money up front and be responsible for making the decisions about what to fund and, of course, justifying those decisions.

A system similar to this operates in France, whereby providers can prescribe according to an approved list and for high-cost exceptions a budget is agreed - but the detailed management of this is dealt with by the hospital and its clinicians. In Germany and the Netherlands, the approach also seems to be based on providers making decisions about the specification of patients' care, with payers specifying areas that are not covered.

This would be a radical departure from current policy, but would meet the demands of oncologists and some of the most vocal lobbying groups.

Yet it gives rise to some serious questions. Is it more or less transparent than the current decision-making process? Will it lead to better decision-making for patients? Will it lead to increasing, rather than decreasing, levels of conflict between the funding body, PCTs and acute providers?

Many clinicians dislike and are highly critical of the exception panel system. The alternative is for them to take responsibility for making difficult decisions about resource allocation in addition to those they already take.

So is it time to get radical? If improvements to the current system of decision-making are not swift enough, then perhaps. If policy makers are unwilling to stand up for localism, almost certainly. But the alternatives may not satisfy all those individuals and groups opposed to exceptional case panels, which would still have a role in any case and the consequences of such a radical change are unclear.