Improving system performance: a case study in the application of the theory of constraints

To thrive in a capitated managed care environment, health systems must enroll more lives to increase revenue, yet they must also control costs to remain viable. This article is a case study of how a team of junior managers and frontline providers solved this conflict for their government-owned health system. The team used a simple, elegant combination of a basic continuous improvement model and the theory of constraints. Using these tools, the team: Exposed a fundamental assumption that was hampering daily throughput; Shifted resources to key processes, improving overall system performance; Significantly increased primary care access with no increase in cost; and Devised a plan to increase capacity with a resource investment that has a payback period of less than two months. The effort has been so successful that the organization's leadership now requires all managers to attend theory of constraints training and has developed short-term and long-term plans to further exploit the team's gains. Although specific issues will be different in other organizations, the approach used is powerful in its simplicity and is easily replicable.