Purchaser-Provider Split in a Traditional Public Service Environment: Three Case Studies of Managing Change

Abstract

This paper examines case studies of purchaser-provider split in three public sector agencies in Queensland, Australia. The paper finds that these market arrangements coincided with organisational change within these agencies. Accordingly, it is difficult to establish a link between purchaser-provider split and the type of improvements that were achieved. Good management practices, improved communication techniques and the application of new technology were important instruments in achieving new efficiencies and improved client outcomes. The value of purchaser-provider split related mostly to its capacity to define outcomes, although developing these measures were also problematic with respect to transaction costs and their inability to measure qualitative outcomes. In addition, purchaser-provider split symbolised change within an organisation, and asserted a change in organisational culture. However, other tangible, operational benefits of purchaser-provider split are not obvious.

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