At the Building on Success 2017 conference, Alex Knight spoke on fixing the healthcare system through the Theory of Constraints lens, mostly as described in his book Pride and Joy (my review), which tells the semi-fictional story of a significant turnaround at a hospital in the UK.
Everyone seems to know that the healthcare system needs help - we are spending more and more of our GDP. And the only way most organizations see to make a change is to cut costs - and which costs? It's the front line workers where most of the expense of healthcare lies. And of course, one can imagine that any hospital has many, many moving parts with dependent events and plenty of variability and key resources needed in many places. It sounds really complicated.
Alex Knight described the core conflict for healthcare. To have an ever-flourishing system, we need high-quality, safe and timely care for everyone; and we need to be financially stable. In order to have high-quality, safe and timely care for everyone, we have to have more front line resources. And in order to be financially stable, we have to reduce costs (due to front line workers).
The basic solution that Alex has developed looks for the inherent simplicity. From the perspective of the patient, it is around getting seen and cared for as quickly as possible. The general idea in the solution is to look at the expected patient discharge date and setup a traditional buffer management approach: focus on those patients where the buffer is more significantly consumed. And then collect data about the causes of buffer consumption and drive improvement projects on the biggest sources. And then continue to improve.
The interesting claim that Alex made was that in all his projects in this environment, he has yet to find a true bottleneck within a hospital. There is always capacity hidden by the practices and policies in play. The general solution that he describes helps to uncover that hidden capacity, which the organization can then make use of to grow the business.
At the end, he summarized what creates the breakthrough in Theory of Constraints:
- Local optima do not add up to global optimum.
- Balancing flow is entirely different from balancing capacity. (We must find out what is disrupting the flow in order to speed it along.)
- Instead of balanced capacity, the real question is whether I have the capacity when I need it.
- The traditional approaches of dissecting and trying to balance capacity and process mapping are "a complete and utter waste of time".