Purchaser-provider split financial definition of purchaser-provider split
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purchaser-provider split an arrangement under which the unified management system of an organization is split into purchasers who buy goods or services and providers who supply goods or services. The purchaser-provider split serves to create an INTERNAL MARKET in which the true costs of making goods or services are easier to identify and incentives to reduce costs are provided. Purchase-provider splits were introduced in the UK health service in the 1980s. See NEW PUBLIC MANAGEMENT, COMPETITIVE TENDERING.