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.<br/>

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.<br/>
The data shows that there is a:<br/>
1) need for a judicious approach in the use of competitive processes to maximise benefits while minimising risks<br/>
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<br/>
3) funders should aim to minimise duplication and administrative burden wherever possible.<br/>
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.