Perceptions of funding and commissioning models for alcohol and other drug (AOD) treatment services in Australia: a qualitative study of service providers and policymakers

Governments across the globe invest considerable amounts in funding alcohol and other drug (AOD) treatment. While much research has focussed on the amount of funding available, value-for money, or the cost effectiveness of treatment, there has been less attention to different commissioning and payment/funding mechanisms. This study sought to examine the strengths and weaknesses of different funding and commissioning mechanisms as perceived by Australian service providers and purchasers.
Qualitative interviews with service providers and funders were conducted in groups of 3 to 10 people (N=190). Data on commissioning mechanisms were then collated against four thematic headings: competitive tendering, historical arrangements, fee-for-service/accredited providers, and third party outsourcing. Data with reference to payment/funding mechanisms were similarly collated for block grants, activity-based funding, and payment-for-outcomes.
The data shows that there is a:
1) need for a judicious approach in the use of competitive processes to maximise benefits while minimising risks
2) multiple purchasing strategies are used in a system and deliberations regarding which strategy is applied should include consideration of the relative emphasis on aspects such as service reliability versus innovation
3) funders should aim to minimise duplication and administrative burden wherever possible.
In the absence of an evidence-base, purchasers of AOD treatment are left with an apparently arbitrary set of administrative decisions regarding commissioning and payment/funding processes. This article offers guidance to service providers and funders when navigating the funding environment in Australia, and may facilitate more informed and considered AOD treatment purchasing decisions.