Outsourcing and Structural Change

In Victoria throughout the late 1990s structural change in the public hospital system was immense as hospitals embarked on a range of market-testing and benchmarking exercises accompanied by downsizing and, in some cases, outsourcing. The clinical services which were subjected to these processes included radiology, pharmacy and pathology, and the non-clinical services included car parking, catering and cleaning, engineering and supply. In Victoria with the election of the Liberal-National government in 1992, outsourcing became a key part of the public management program (Stockdale, 1995, p. 29). This occurred alongside considerable decreases in state government funding, the implementation of industrial reform and the aggregation of metropolitan public hospitals into networks. The introduction of the Federal Liberal-National government’s National Competition Policy (NCP) in 1995 with its rationale that private sector pressures and competition would make the public sector more efficient, saw widespread changes to the provision of structure of all public sector services.