Health Secretary John Reid’s announcement today that ‘health tourists’ are to be charged in advance for treatment on the NHS has profound implications – and not just for the NHS.

As the NHS operates at the moment, anyone can turn up at a hospital and expect to be treated. That means that they do – and this includes some people from abroad who come here specifically to take advantage of a free NHS. Mr Reid calculates that this ‘health tourism’ costs the NHS £200 million a year, and his announcement today is designed to plug that leak.

But money is not the real issue. In terms of the NHS’ £68.7 billion budget, £200 million is, after all, chicken feed. And there is little evidence that ‘health tourism’ is any worse today than in previous years. What has changed is that, in the past, the idea of an NHS which was free – to everyone - was so widely shared that we put up with what we now think of as abuses, such as health tourism.

Indeed, the real waste is not these headline grabbing issues but more prosaic problems such as bed-blocking, when the elderly are forced to stay in hospital when they are medically fit to leave. Every day, more than 3,500 older people remain in hospital simply because no follow-up care is available outside. Around one-third of those are stuck in hospital for over a month. This bed blocking accounts for 1.7 million lost ‘bed days’ every year. Even with the reforms which the government has already introduced to deal with this, the Department of Health does not expect to be able to reduce the number of people delayed to less then 2,500 by the end of 2005.

So Mr Reid is looking to the US, where elderly patients of Kaiser Permanente, a not-for-profit health insurer in California, spend a third of the time in hospital that NHS patients spend for such problems as asthma, bronchitis and strokes, and yet achieve far better clinical results. That is also why he has decided to give foreign health care providers most of the £2 billion programme to build fast-track treatment centres to cut the NHS waiting list.

Times have changed since the days when no one really cared whom the NHS treated. The government is now ploughing so much money in - money which it has taken at our expense through tax increases - that the public is no longer prepared to put up with paying for the treatment of foreigners who come to the UK to mend their health on someone else’s money.  Mr Reid well knows that if he doesn’t demonstrate that he is alive to such concerns, he risks undermining Labour’s entire case for taxing and spending.

Once, however, we accept that health care should be made available not on the principle that everyone is always treated, but only to those who qualify for it then we transform the entire debate about the provision of health care. The Conservervatives brought this onto the agenda with their "Patient's Passport" proposals. Now New Labour is taking up the baton. And that means that although the sums involved in today’s announcement may not be that large, the implications are huge and their consequences range way beyond the NHS.

David Blunkett may have based his case on the introduction of ID cards on their use against criminals – and especially to deter terrorists – but Mr Reid has also become a strong supporter of the idea. If we had to carry ID cards then, of course, it would make it much easier to determine who should, and who shouldn’t, be billed for their treatment. It is one of the most controversial ideas dividing Cabinet: but Mr Reid's determination to act on it is a sign that it won't go away.