By Justin Parkinson
BBC News political reporter, in Bournemouth
People could be rewarded for taking regular exercise, the Lib Dems say
People should be given income tax breaks for living healthy lifestyles, the Liberal Democrats have said.
Health spokesman Norman Lamb said "points" should be awarded to those who attend regular cancer screenings and take part in physical activities.
Local health boards must be set up with powers to cut taxes for people who accumulate enough points, he added.
Poorer people could have their benefits increased if they pursue a better lifestyle, Mr Lamb said.
He criticised the current system for being too "Stalinist" and top-down.
It should instead be more like insurance schemes run in countries like the US and South Africa, which take into account people's activities when setting costs, Mr Lamb added.
'Must be practical'
He told a press briefing at the Lib Dems' annual conference in Bournemouth: "You have got to find a way to incentivise better health.
"The scheme has to be practical and has to work in disadvantaged areas too.
"You could, for instance, have a card which you swipe whenever you take part in regular screenings or when you take part in physical exercise."
The scheme would work under Lib Dem plans to introduce a local income tax to replace council tax, Mr Lamb said.
He added that up to 10% of the NHS's annual £100bn budget could be saved, as better illness prevention cut treatment costs.
Mr Lamb said the scheme would be introduced in England, but would hopefully be implemented elsewhere in the UK.
He added: "I'm sure we won't be able to police the amount of wine you drink every evening. I don't seek to move the scheme beyond what is possible to measure."
Mr Lamb said: "I don't begin to claim that all these ideas are going to work.
"But I think there is an advantage in moving away from centralised control."
A similar scheme in California had reduced the smoking rate from 15% to 9%, Mr Lamb said.
He also said there should be fines for people missing NHS appointments and called for a crackdown on bad behaviour and violence in accident and emergency wards.