The health care system has experienced change in policy direction over recent years, which will have a significant impact on the provision of health services in general, but particularly within the public hospital sector. Policy makers have turned their attention to the high costs of hospitals. The purpose of this research report is to analyse the organisational implications of the introduction of a casemix management system, a new funding and information system, to be introduced to Queensland Public Hospitals on January 1, 1995. The issues of efficiency, effectiveness, equity and excellence are examined in relation to health care provision and in consequence to the introduction of casemix. An examination and analysis of the structural and organisational changes that are likely to result are also outlined. The methodology involves a literature review. The areas of review deal with organisational theory and change, organisational design and casemix from both the USA experience and Australia to date. These issues are examined in the Queensland context generally. The report demonstrates that casemix provides a powerful tool for a radical change in the way that hospitals are organised and managed. It explores a numbers of factors essential to structure, organisational change and design. The report also provides some important points that should be considered in the implementation of casemix. Finally, the report concludes that only by examining the effects of casemix over the next five to ten years, will the debate surrounding casemix be resolved.