A+Unifying+Approach+102012

8/11/2019 A+Unifying+Approach+102012

http://slidepdf.com/reader/full/aunifyingapproach102012 1/16

The Theoryof Constraints in health and social care

A unifying approach that helpsdoctors, nurses and managers worktogether to achieve a breakthrough inhealthcare performanceBy Alex Knight, Founding Partner, QFI Consulting

contents



Contents

Introduction

Understanding the roots of the Theory of Constraints

Summary

Applying the Theory of Constraints in healthcare

Strategy 1: having a robust and trustworthy patient-centred priority system

Strategy 2: managing according to patient priorities

Strategy 3: implementing a sustained breakthrough in performance

A new way forward

Example results achieved in healthcare through the Theory of Constraints

About the author

References

www.qficonsulting.com/healthcare

p1 |

p2 |

p4 |

p5 |

p6 |

p7 |

p8 |

p10 |

p11 |

p12 |

p13 |

contents



For example, in England, “NHS net

expenditure has increased from £40.201

billion in 1999/2000 to a forecast outturn

of £102.985bn in 2010/11. The planned

expenditure for 2011/12 is £105.9bn.”

(NHS Confederation, Key Statistics on

the NHS, October 2011). This equates to

a 2.8% increase in 2011/12 compared

to more than 10% over the previous

twelve-year period. In The Netherlands

the Administrative Coalition Agreement

between the government, hospitals and

health insurers for 2012-2015 (Den Haag,

4th July 2011) has limited budget growth

to a maximum of 2.5%. This applies

primarily at national level but is also

relevant to individual hospitals: “Growth

beyond contractual agreements is notcompensated unless, under the statutory

duty of care, additional contracting has

become necessary.” With overproduction

in 2010 and 2011 being subtracted from

future budgets this means zero budget

growth from 2012 to 2015.

1.

Introduction

There are more and more examples of the Theory of

Constraints delivering unprecedented breakthroughs in the

quality and timeliness of care and financial performance.

Could this be the unifying approach that doctors, nurses and

managers have been looking for?

In today’s environment this is intensifying with the growing pressure caused by medical costs

rising faster than revenues1. Any attempts to improve the quality and timeliness of patient

care while simultaneously pursuing financial sustainability can become a challenge too far.

Without a way forward this tension can often result in less than harmonious relationships

between clinicians and managers.

The Theory of Constraints (TOC) offers a way forward. TOC is a methodology that is

delivering unprecedented breakthroughs in the quality and timeliness of care and financial

performance. It is also proving to be a methodology that doctors, nurses and managers can

all embrace.

Doctors, nurses and managers are increasingly required to work together to lead and

manage a hospital yet they often appear to be approaching the task from different

perspectives. While clinicians are striving to master the advances in their respective fields

and deliver the best possible care for their patients, managers are coming under ever-

increasing pressure to reduce costs.

1

Increased pressure to

reduce medical costs

Time

£$€

Increased pressure

to limit/reduce

healthcare budgets

As the cost of medical

treatment increases rapidly incomparison to growth of the

available budget the risk to

providing quality and timely

access to care increases.

This paper will show:

• The similarities and differences between the development

of TOC and the development of medicine

• The necessary and sufficient strategy and associated tactics tostart to implement TOC

• A practical and proven application of TOC in healthcare.

Figure 1: an ever-increasing problem

contents



2

Understanding the roots of the Theory of Constraints

The Theory of Constraints was developed by Dr Eliyahu

M Goldratt as an improvement methodology to create

breakthroughs in performance in seemingly complex

organisations. As a physicist Dr Goldratt used the history of

the study of disease to explain his struggle to find a systematic

approach to management and the development of the Theory

of Constraints methodology (Goldratt, 1987). He explained the

development of a systematic approach as moving through three

distinct stages: classification, correlation, and cause and effect2.

The first stage – classification – is as old asthe Old Testament. When certain symptoms

of disease appeared houses were quarantined

and, as symptoms developed, the individual

was isolated. However, with other symptoms

that were not spread through human contact

it was understood that isolation was not

necessary. In this way diseases were

classified not only by their symptoms but also

by their potential for infection. These forms of

classification helped to localise and prevent

the spread of disease.

In the management of modern hospitalsthe classification stage of a systematic

approach to improvement comes via hospital

data. The claimed benefit of classified data

is improved communication. However,

using this data can be time-consuming and

expensive. In England the NHS tried to

develop an integrated patient record system,

which claimed that “NHS Connecting for

Health supports the NHS in providing better,

safer care by delivering computer systems

and services which improve the way patient

information is stored and accessed” (NHS,2007). However, the project failed and the £12

billion scheme was axed in September 2011.

The second stage of a systematic approach

to disease – correlation – was only achieved

comparatively recently. Edward Jenner found

that if serum is transferred from an infected

cow to a human body, the human would not

be infected with smallpox. Immunisationhad been discovered. Medicine was no

longer limited to preventing the spread

of the disease but to preventing and, in

some future cases, eliminating it. For Dr

Goldratt the importance of this stage was

in understanding how to improve things.

However, the question of why was not yet

answered. Without the ‘why’ it is perhaps

not surprising that it took over seventy years

for Jenner’s methods to be widely accepted.

Correlation today can be seen in any

airport bookshop where management titlessupporting this stage abound. Unfortunately,

many of these books have little more than

evocative titles and sensationalism as the

basis for their claims of how to improve

organisations. One exception is Built to Last:

Successful Habits of Visionary Companies

(Collins, J.C. and Porras, J.I., 1994). Collins

and Porras robustly and elegantly describe

the characteristics of long-running, top-

performing companies. It breaks many of

the myths about the need for charismatic

leaders and provides an excellent insight intothe question of how these top companies

continue to outperform their competitors.

Finally, the third stage – cause and effect

– was achieved by Louis Pasteur when he

made a leap of imagination: an assumption

that those tiny things that Leeuwenhoek

found under his microscope more than a

Essays on the Theory of

Constraints.

Apologia, pages 23-28

2.

contents



3

hundred years before, those things we call

germs, are the cause of diseases. As a

result the field of microbiology sprang to life.

Many years later Dr Goldratt explained that,

through hard work and an understanding

of cause and effect, medicine was able

to create immunisation for a very broad

spectrum of diseases where this was not

created spontaneously in nature.

Dr Goldratt’s Theory of Constraints applies

this third stage – cause and effect – to

the management of organisations. It is

described in his business novel, The Goal

(Goldratt, E.M. and Cox, J., 2005), which

has sold over four million copies worldwideand is commonly found as a core text in

business school programmes. Perhaps

more interestingly, it has been cited as the

business text that has most often been

finished by readers and most of the readers

claim this book is just common sense, even

if it is not common practice. This claim

pleased Dr Goldratt enormously because,

as a scientist, he saw common sense as

the highest praise for his explanation.

The main purpose of Goldratt’s

comparisons of the study of medicine

with the study of organisational systems

relative to management was to highlight

the significance of medicine as a mature

science that has, for many years, been

in this third stage of cause and effect. It

is widely agreed among the scientific

community that this stage is based upon

the search for the minimum number of

assumptions that will explain, by direct

logical derivation, the maximum number ofnatural phenomena.

For example, Dr Goldratt was the first to

postulate that the performance of any

goal-oriented system can be determined

by only three measures: Throughput (T),

Investment (I) and Operating Expense (OE).

The rate at which the system

generates ‘goal units’ (NB: inhealthcare the goal is not, as inbusiness, simply to make money butto provide affordable, high-qualityand timely care)

All the money currently tied up inthe system

All the money the organisationspends in generating goal units

Throughput (T):

Investment (I):

Operating Expense (OE):

Classification and

correlation donot answer the

question ‘Why?’

contents



4

Summary

Table 1: Summary of the three stages

Example in medicine Example in managing

organisations

Comments

Stage 1:

Classification

Diseases were classified

not only by their symptoms

but also by their ability to

infect others. These forms

of classification helped to

localise diseases and stop

them from spreading.

The classification of hospital

data. The main benefit of

this stage is claimed to be

improved communications

within this seemingly

complex system.

In this stage the value of

the classification is directly

related to its practical use.

Stage 2:

Correlation

Edward Jenner’s work on

immunisation. Medicine

was no longer limited to

preventing the spread of the

disease but to preventing

and, in some future cases,

eliminating it.

Collins and Corras ‘Built

to Last’, analysing the

characteristics of long-

running, high-performing

organisations.

The importance of this

stage is its contribution

to understanding HOW to

improve the system.

Stage 3:

Cause and

Effect

Louis Pasteur’s assumption

that those things that

Leeuwenhoek found under

his microscope more than

a hundred years earlier, the

things we call germs, are

the cause of diseases.

Goldratt’s assumption that

inherent simplicity exists in

the most seemingly complex

goal-oriented organisations

and his Five Focusing Steps

for developing second-order

solutions.

The search for the answer

to the question WHY? The

search for the minimum

number of assumptions that

will enable us to explain, by

direct logical derivation, the

maximum number of natural

phenomena.

contents



Applying the Theory of Constraintsin healthcare

5

A hospital can seem very complex but at its heart it is

a system of dependent events experiencing statisticalfluctuations (see Figure 2).

There are literally thousands of different

patient pathways and on any one day

there is a combination of unplanned and

emergency admissions, and planned

outpatient and inpatient treatments.

If we look at one effect – the flow of patients

through the system – it is easy to recognise

that patients’ lengths of stay in hospital vary

considerably, from a few hours to many

days. One hypothesis might be that the only

cause of the spread is the variation in clinical

recovery time across patients. However, it is

clear to those working in such a system that

there is a more dominant cause of variation in

length of stay, a cause related to disruption or

delay, either during the patient’s journey or atthe end of their care.

This underlying cause impacts upon the

quality of care and often puts staff under

increased pressure. Extensive research3,

together with the common experience of

health professionals, indicates the quality

and timeliness of care rapidly deteriorates

when staff are overstretched. Catastrophic

failures most often occur during extended

periods of unreasonable staff pressure.

However, on the other hand, simply adding

additional resource risks financial viability as

it increases operating expense in a regime of

zero revenue growth. At the same time, trying

to find consensus regarding the system-wide underlying cause of this unnecessary

disruption or delay is often met with a

barrage of finger-pointing and accusations.

Dr Goldratt’s hypothesis is that underlying

any seemingly complex, goal-oriented

system there is inherent simplicity. In

essence there can only be one weakest

link in a chain and as a result there are very

few governing factors (or, in TOC terms,

‘constraints’). His Five Focusing Steps of

improving any organisation are an inevitableand logical derivation of this hypothesis.

He argues that any attempt to calculate the

answer to his first step in isolation (identify

the system’s constraint) is a waste of time

and effort. Instead, he advocates a controlled

experiment based on his five steps. Outlined

below is a snapshot of the strategy and

associated tactics necessary to start the

implementation of the Five Focusing Steps in

any healthcare environment.

Developing a System Resilience Approach

to the Improvement of Patient Safety in

NHS Hospitals, M Williams (Williams,

April 2011). The Checklist Manifesto, Atul

Gawande (Gawande, 2010)

3.

Figure 3: Goldratt’s Five Focusing Steps

The FiveFocusing Steps

Step 1Identify the system’s

constraint(s)

Step 2

Decide how to exploit the

system’s constraint(s)

Step 3

Subordinate everything else to

the above decision

Step 4

Elevate the system’s

constraint(s)

Step 5

Warning!!!! If in the previous

steps a constraint has been

broken, go back to step 1, but

do not allow inertia to cause a

system’s constraint.

Figure 2: an example of a health and social care chain of activities

EmergencyDept.

Medical Ward

Home

Home Home

GP referral

Self referral

Ambulance AssessmentUnit Theatre

GP referral

Home Home

Social Services

Home

SurgicalWard

Nursing & ResidentialCare Home

Social Services

Home

Social Services

Home

contents



6

Strategy 1: having a robust and trustworthypatient-centred priority system

The best way to identify the underlying constraint is to start with

the creation of a robust and trustworthy patient-centred prioritysystem and then identify which resource or task combination

most often disrupts this patient-centred prioritisation.

Diagnosis starts at the beginning of a patient’s

care and continues throughout their care.

This continuation of diagnosis results in new

tasks emerging throughout the patient’s

journey. This is caused by, for example:

clinical recovery time varying significantly

from patient to patient even when patientsare suffering from the same illness type

any patient may have a mix of illnesses

recovery time becoming extended for some

patients when they are not treated in a

timely manner.

To take account of these emerging and

changing needs QFI has invented a patient-

centric prioritisation system called QFI

Discharge Jonah4. For each patient a

clinically derived planned discharge date isinitially set in Jonah by a multi-disciplinary

team, either on admission or within 24

hours of the patient’s arrival. The patient’s

planned discharge date is based only on

the expected clinical recovery time of the

patient and is challenging but achievable

(this clinically derived planned discharge

date should never be based on recent

experience with other patients or current/

best practice from other hospitals). Patients

will of course recover faster or slower than

expected but the planned discharge date isadjusted, moving forward or back, in light of

the rate of clinical recovery.

It is often the case in seemingly complex

organisations that the implications of not

doing something are larger than might

have been supposed. In the above setting

a patient can only depart when two

conditions are achieved: first, the patient

has clinically recovered and, second,

when the last associated task has beencompleted. Capacity is wasted and/or

throughput is lost when any one of the

associated tasks takes longer than the

clinical recovery period.

In the first scenario – where a patient

recovers faster than expected – there is

a much greater likelihood that one of the

outstanding tasks will delay the patient’s

departure than in the second scenario. As

a result priorities across all patients will

change, making it extremely important that

the hospital system has the earliest possiblenotification of one patient recovering faster

than expected and another recovering

slower than expected.

•

•

•

An analysis of a European

800+ beds acute hospital

shows us that in a scenario

in which every planned

discharge date was

reviewed every day and

half the patients recovered

faster and half slower thanexpected, then every day

gained from those who

recovered faster would

allow approximately 3,000

extra patients to be treated

a year. If we assume the

average throughput per

patient is €2,000 then this

is equivalent to €6.0 million

extra throughput.

Jonah is the name of a key character in

Dr Goldratt’s book, The Goal. In the book

Jonah guides the analysis and process on

ongoing improvement. The basis of this

scientific approach is first explained in

Chapter 4.

4.

contents



Strategy 2: managing accordingto patient priorities

Synchronising the flow of current patients around an initial

planned discharge date is not sufficient to maintain a robustand trustworthy patient-centred prioritisation. Priorities must

not only be based on updating the actual rate of recovery of

the patient but also the latest understanding of disruptions or

delays. Hectic priorities – hot, red hot, and do it now! – cause

chaos across the system and result in clinical and managerial

staff bouncing from crisis to crisis. Even when patient flows are

synchronised, a priority system can still lead to chaos.

There are many different sources of

variability in the day-to-day running of a

hospital. Murphy’s Law is also alive and

well. QFI Discharge Jonah is based on a

unique modification to Dr Goldratt’s buffer

management process. Buffer management

sets priorities in a four-colour-coded system

according to the degree to which the buffer

time is consumed. Each patient’s planned

discharge date is buffered (see Figure

4). The impact of changing a planned

discharge date and/or disruption/delay toany one patient is understood and taken

into account when adjusting the priority list

across all patients (see Figure 5). If a patient

has passed their planned discharge date or

is predicted to pass their planned discharge

date because of the remaining duration of

an outstanding task taking longer than the

remaining time of the planned discharge

date, then the patient status will be black.

This enables staff to address the first and

most fundamental question: “Of all the

patients I could attend to next, which one

should I choose?” Having the correct

answer to this question provides the most

important piece of information a resource,

such as a doctor, nurse, manager or central

department, requires if it is to play its role in

improving patient flow.

7

Patient 1

Patient 2

Patient 3

Patient 4

Patient 5

Figure 4: identifying the causes of disruption/delay for a patient

Figure 5: identifying the cause of disruption/delay across the most patients

Patient 1

contents



8

Strategy 3: implementing asustained breakthrough in performance

When a robust and regularly updated priority list is threatened by a non-clinical cause of

disruption or delay it is far better to identify and permanently eradicate the cause thanto adjust the priority list. Recording the resource that is causing disruption or delay to

a patient journey as the patient moves through the green, amber, red and black buffer

zones makes the resource immediately aware it is disrupting the patient’s journey. This

then allows the resource the opportunity to take effective and proactive action.

The process also enables analysis of

the few resources most often causing

the most disruption/delay across

the most patients – the constraint(s).

This is a robust way to focus

improvement initiatives and improve

overall performance of the system.

QFI Discharge Jonah enables this

analysis to be carried out even when

the dependency between tasks is

unclear or emerges during the patient journey. It also allows clinicians and

managers to answer the second key

question: “Which task, resource or

task/resource combination is most

often causing the most delay across

the most patients?”

QFI Discharge Jonah presents

managers and clinicians with the

above analysis based on live data

twenty-four hours a day, seven days

a week. Through a series of daily andweekly buffer meetings these sources

of disruption can be identified and

eliminated.

However, this is nothing more than a

starting point to the analysis needed.

Just because a task, a resource

or a combination of both has been

identified as most often associated

with the most disruptions or delay

across the most patients, it does

not give us the answers to the threecornerstone questions of TOC:

0

20

40

60

N u m b e r o f t i m e c i t e d

M e d i c a l R e v i e w

( O w n t e a m )

O t h e r H o s p i t a l

T r a n s f e r

M e d i c a l R e v i e w

( S p e c i a l i s t T e a m )

O T A s s e s s m e n t /

T r e a t m e n t

T T O s

80

100

Figure 6: top delay reasons (all delay types)

contents



9

Which task, resource or task/resource

combination is most often causing themost delay across the most patients?”

What to change? The process helps

focus our initial exploration so that we

know what, of all the things that could

be changed, will have the biggest

impact on the whole system.

What to change to? This is where

the development of a second-order

breakthrough is possible. Through the

rigour of cause-and-effect analysis and

an ability to identify and modify provenTOC-based solutions, it is possible

to develop rapidly implementable

solutions tailored to the environment.

How to achieve the change? People

do not resist change. They resist

changes they believe, according to

their judgement, will have a negative

impact upon them or others they care

about or are responsible for. People

are willing to adopt an approach when

they understand and agree with theunderpinning logic, and understand that

the logic is being checked in their own

hospital through a series of controlled

experiments. It is important that the

first (and subsequent) actions are:

common sense, even if not common

practice; can be rapidly implemented;

do not require daring acts of leadership;

and deliver immediate and substantial

benefits in line with expectations.

“

P h y s i o A s s e s s m e n t /

T r e a t m e n t

I n v e s t i g a t i o n

- C T S c a n

C o m m u n i t y

H o s p i t a l

B e d

I n v e s t i g a t i o n

- E c h o

C a r e P a c k a g e

contents





11

Example results achieved in healthcarethrough the Theory of Constraints

“I have seen many methodologies but,

putting it simply, the combination of the

Theory of Constraints and QFI Consulting

delivers results much faster than anything

else around.”

Averil Dongworth, Chief Executive

Barking, Havering & Redbridge University

Hospitals NHS Trust

“By working with QFI to apply their

Theory of Constraints approach to our

discharge processes across all our twelve

community hospitals, we have been

able to reduce our length of stay by a

third within a matter of weeks and make

big improvements to the quality of our

patients’ rehabilitation and discharge. The

process has developed staff’s confidence

in their ability to take control and makechanges which improve quality and

productivity and has significantly improved

multi-agency working across health and

social care in Derbyshire.”

Tracy Allen, Managing Director

Derbyshire Community Health Services

England

“I am delighted we are at the forefront of

productivity initiatives in the NHS Mental

Health service.”

Maria Kane, Chief Executive

Barnet Enfield and Haringey

Mental Health Trust

“With the start of the TOC-programme in

hospitals in the UK, USA and Australia we

were able to see their results in healthcare

improve. This success was a reason

why we worked with QFI, the developers

of this simple Jonah approach. Within

a few months the results were visible:

the average length of stay decreased. A

practical approach and not just a beautiful

story in a book!”

Mary Groenewould, Service Director

Amphia ZiekenhuisThe Netherlands

“The Jonah project uses an innovative

approach that cuts across all discipl ines

and partner agencies. It has givenus the opportunity to dispel myth and

anecdote around the reasons for delayed

discharges. Even in the early stages of the

pilot, we have identified key issues and

trends which can now be addressed.”

Gary Cockayne, Assistant Director

of Operations, Surgical Specialties

Kettering General Hospital

NHS Foundation Trust

“Following a review of Intermediate Care, by Derby City PCT Commissioners, we

were challenged to reduce the average

length of stay in our community hospital

from 40 days to 30 days within the next

six months. I knew this would require a

swift, sustainable major change in the way

we delivered our service.

My confidence in QFI Discharge Jonah

was rewarded by an average length of

stay of 20 days which is maintained and is likely to reduce further, thus benefitting

patients and delivering Best Value.

In addition it has been a joy to watch

the development of the ward teams, the

increase in individual staff confidence,

plus the improved interdisciplinary and

multi-organisational working.”

Glenys Crooks, Associate Director,

Rehabilitation and Cancer Directorate

48% reduction in length

of stay in five weeks

Acute NHS mental health

hospital, England


of stay in surgicalinpatient units

High-performing acute

hospital, The Netherlands

37% reduction in

length of stay across 12

community hospitals

Community health

services, England


of stay in four months.

Community hospital,

England


of stay in five weeks

Acute NHS trust, England

contents



12

About the author

Alex Knight

Founding Partner, BSc, MBA, CEng

Alex Knight is a founding partner of QFI Consulting. Prior to this

Alex was the managing director of Ashridge Consulting Group

(part of the Ashridge Business School) and a board director of

Ashridge. At Ashridge Consulting Alex’s passion was to find the

best consulting approaches from across the world; approaches

that deliver results. At the same time as starting QFI, Alex was the

first chief executive of Goldratt Consulting Ltd (whose chairman

was Dr Goldratt), helping to steer it through its formative years as

a global organisation before handing it on to Rami Goldratt

(Dr Goldratt’s son) as part of a planned succession process.

Alex has been personally mentored by Dr Goldratt for over two decades. He has pioneered

the application of Dr Goldratt’s Theory of Constraints in many industries across the globe,

including health, financial services, manufacturing and FMCG. Alex is the inventor and

developer of QFI’s TOC applications - from concept through to software and implementation

processes. Alex also led the introduction of the first ever Masters in TOC: QFI’s Masters in TOC

(Health and Social Care Management) at Nottingham and Trent Business School.

Alex is not satisfied unless our client organisations reach new and unprecedented levels

of performance and he is constantly seeking better and faster ways for clients to achieve

breakthroughs in performance. Alex is leading the development of QFI’s TOC Strategy and

Tactics process, an application that will provide QFI and its clients with a coherent and robustroadmap to achieve whole-system breakthroughs in the fastest possible time.

Alex’s career, firstly as a tutor and consultant at Ashridge and then as a leader of

organisations, has enabled him to work in many industries and across many continents. Alex

has led many TOC implementations in healthcare organisations in the UK, The Netherlands,

the United States and Australia. He has provided strategic consulting to many organiations,

including the National Childbirth Trust, the Linney Group, Samworth Brothers, the Robert

Gordon University, Zurich and Axa.

QFI Consulting LLP

P O Box 935Tring

Hertfordshire

HP23 4ZX

www.qficonsulting.com

[email protected]

Copyright © QFI Consulting LLP 2011

contents



References

13

Den Haag. (2011). Administrat ive Coalition Agreement

Gawande, A. (2010). The Checklist Manifesto. London: Profile Books.

Goldratt, E. M. (1987). Essays On The Theory of Constraints.

Great Barrington: North River Press.

Goldratt, E.M. and Cox, J. (2005). The Goal (3rd ed.). MA: North River Press.

Collins, J.C. and Porras, J.I., (1994). Built to Last: Successful Habits of Visionary Companies.

United States: Harper Collins Publishers.

NHS. (2007). NHS Connecting for Health.NHS Confederation. (2011). Key Statistics on the NHS

Williams, M. D. (April 2011). Developing a System Resilience Approach to the Improvement of

Patient Safety in NHS Hospitals.

contents



Copyright © QFI Consulting LLP 2011

contents

Date post:	03-Jun-2018
Category:	Documents
Upload:	peanutsmonkey
View:	218 times
Download:	0 times

A+Unifying+Approach+102012

Documents