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Outsourcing and benchmarking in a rural public hospital : does economic theory provide the complete answer?

Young, S. H. 2003, Outsourcing and benchmarking in a rural public hospital : does economic theory provide the complete answer?, Rural and remote health, vol. 3, no. 1, pp. 124-138.

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Title Outsourcing and benchmarking in a rural public hospital : does economic theory provide the complete answer?
Author(s) Young, S. H.
Journal name Rural and remote health
Volume number 3
Issue number 1
Start page 124
End page 138
Total pages 14 p.
Publisher Australian Rural Health Education Network
Place of publication Deakin West, A.C.T.
Publication date 2003
Summary INTRODUCTION: The ideology and pronouncements of the Australian Government in introducing 'competitive neutrality' to the public sector has improved efficiency and resource usage. In the health sector, the Human Services Department directed that non-clinical and clinical areas be market tested through benchmarking services against the private sector, with the possibility of outsourcing. These services included car parking, computing, laundry, engineering, cleaning, catering, medical imaging (radiology), pathology, pharmacy, allied health and general practice. Managers, when they choose between outsourcing, and internal servicing and production, would thus ideally base their decision on economic principles. Williamson's transaction cost theory studies the governance mechanisms that can be used to achieve economic efficiency and proposes that the optimal organisation structure is that which minimises transaction costs or the costs of exchange. Williamson proposes that four variables will affect such costs, namely: (i) frequency of exchange; (ii) asset specificity; (iii) environmental uncertainty; and (iv) threat of opportunism. This paper provides evidence from a rural public hospital and examines whether Williamson's transaction cost theory is applicable. d into an analysis that relies solely on transaction
Language eng
Field of Research 150312 Organisational Planning and Management
HERDC Research category C1 Refereed article in a scholarly journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30002175

Document type: Journal Article
Collection: School of Management and Marketing
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