In response to the increasingly competitive and demanding health environment, many Australian hospitals have implemented, or are considering, the implementation of organisational forms and management practices which call for the decentralisation of allied health services. From its early development, the John Hunter Hospital in Newcastle was planned to have a decentralised structure. In response to inquiries from many allied health professionals in New South Wales, Victoria and Western Australia, this paper discusses the difficulties experienced by physiotherapists working in this decentralised management structure and the rationale behind the decision to withdraw from such a structure and to form a centralised professional department.