Limit-setting in publicly funded healthcare is unavoidable, and increasingly important in the governance and management of the demand for health services. The work of limit-setting takes place in the organising of the provision of health services, where various health workers (professionals, administrators, unit managers, politicians) collectively exercise their skills. Limit-setting often creates tensions which impose the quest for legitimacy; it involves norms and values which are related to the interests of the health workers, and moreover to society at large. In that sense, limit-setting is related to internal processes of legitimacy within the healthcare organisation, i.e. internal legitimacy, and external processes of legitimacy where citizens are legitimating the activities in the healthcare organisation, i.e. external legitimacy. The purpose of this thesis was to discover, and increase the understanding of the dilemma associated with sustaining, generating and designing internal legitimacy, when working with a policy of limit-setting in healthcare, in relation to the provision of Assistive Technologies (AT). It has explored what health workers do when they are working with a policy, and in particular how they work out what they should be doing. Finally the role of mediating institutions in supporting and designing internal legitimacy, was explored in the thesis. Following a case-study design and a qualitative approach, where fifty-seven semi-structured open-ended interviews were conducted, data allowed the exploration of internal legitimacy in a context of complex interaction and construction of policy work in two Swedish county councils. This research produced a number of key findings; in an environment of finite resources health workers encountered situations that were characterised by conflicting pressures, and handled these by way of interaction, sense making, presenting arguments, negotiating and seeking support for an appropriate course of action and practices. The policy work with limit-setting can therefore be regarded as a dynamic interactive process, which incorporates several actors in different situations and locations, together negotiating and institutionalising the policy. Various policy sites, which had the role of mediating institutions, were identified, and were important in the interactive processes of forming a shared collective meaning in order to reach an appropriate act. Hence, designing legitimacy has to acknowledge the interactive policy work, and its contextual character, taking place at the different levels of a healthcare system.