Does Healthcare have a theory of constraints?

When I discuss the chapters of my career, I typically describe four: an IT/Tech chapter, a move to Manufacturing and Operations, then onto Healthcare and Operations, and finally, consulting. It is usually the middle two chapters that people ask me more questions about, as many people (especially those in Healthcare) see Manufacturing and Healthcare as two opposite sides of a coin. They ask me how I could manage to work in both. They “aren’t relatable”, “vastly different (one focusing more on product, the other on people)”, and have little meaningful similarities or processes to learn from each other. And yes, sometimes I’ve sensed (and outright been told) that production processes or concepts don’t apply to healthcare. I couldn’t disagree more, as there are plenty of parallels. Let me walk through one such example.

Over the past few months, I’ve shared metrics in manufacturing and healthcare, exploring how the respective elements of people, safety, quality, delivery, and cost are complementary and, at times, at odds with one another. While the company strategy helps to establish the KPIs (or critical few), that does leave the remaining metrics to ‘compete’ with one another for success and progress. At this point, natural constraints appear in any process, that leads to difficult decisions being made (ex. do you store extra inventory, at a cost, to be able to provide more timely service)? Much like in project management, the age-old saying “good, fast, or cheap—pick any two” applies to many processes and industries, including healthcare. I first wrote about the theory of constraints many years ago.

Project Management: Is the Triangle Still Adequate?

While healthcare professionals may resist drawing parallels between their work and production, the underlying constraints, cost, speed, and quality (outcomes) are just as relevant in a healthcare setting. The reluctance to embrace this perspective (especially cost) may stem from a perception that equating patient care to a product diminishes healthcare’s “compassion” and ethical weight. I agree there is a distinction in the respective outputs, and there is no doubt that amongst the three constraints, outcomes reign supreme. It is an important distinction (and the ultimate priority) where lives and health will hang in the balance.

However, having worked in food and aerospace manufacturing, is it not equally applicable to say that the quality of the work in those industries can also significantly impact an individual’s health (or life)? It might be a rarer circumstance, but the situation can (and does) still arise. I’ve seen it firsthand in Aerospace, where production errors led to a helicopter crash.

Failing to acknowledge these constraints and their interplay could hinder progress in delivering more efficient and effective care. After all, where would healthcare be without technological advances and the ability to manufacture the necessary equipment?

Before I go any further into the topic of the constraints, I feel it’s best to clarify “healthcare” (for this article at least), to ensure we’re all thinking of the same scope. What I consider to be healthcare is likely much broader than what many think, where the focus is on primary care (physicians primarily) and hospitals. When I think of healthcare, I think of those aspects, including allied professionals, long-term care, home care, laboratory and testing, dentistry, optometry, and many other fields. I’ll circle back to this later in the article (not surprisingly, when we discuss cost).

Understanding the Three Constraints in Healthcare

The three primary constraints in healthcare manifest as wait times (speed/delivery), patient outcomes (quality), and cost. Each factor is crucial to the system’s efficiency and effectiveness, yet optimizing all three simultaneously is a significant challenge.

Wait Times (Speed): The speed at which patients receive care is a persistent issue in the Canadian healthcare system. Long wait times for specialist consultations, diagnostic tests, and surgical procedures frustrate patients and contribute to worsening health conditions. Reducing wait times often requires increased resources, such as more healthcare professionals, expanded facilities, or streamlined administrative processes.
Patient Outcomes (Quality): Quality in healthcare is measured through patient outcomes, including survival rates, complication rates, patient satisfaction, and long-term wellness. High-quality care requires skilled professionals, advanced medical technology, and comprehensive treatment plans. However, high-quality care is resource-intensive and often leads to increased costs.
Cost: Healthcare in Canada is primarily funded through public taxation, meaning cost control is a priority for policymakers. Providing “universal” healthcare while managing rising expenses related to aging populations, chronic disease management, and medical advancements is a balancing act. Cutting costs without compromising care quality or accessibility is one of the most significant challenges in the system. This is often the constraint that Canadians feel less comfortable discussing, especially when confronted with disease, treatment, and our mortality. Still, it must play a role, as it is an economic reality.

Do Trade-offs Occur?

The short answer is yes, trade-offs between speed, quality, and cost are inevitable in healthcare. Here’s how they typically manifest:

Prioritizing Speed and Quality Over Cost: Reducing wait times and improving patient outcomes usually requires additional funding. Hiring more healthcare professionals, investing in better technology, and expanding healthcare infrastructure all demand financial resources. Governments and healthcare institutions often struggle to allocate sufficient funding to meet these demands, leading to budget deficits or the need for increased taxation.
Prioritizing Cost and Speed Over Quality: Cutting healthcare costs while attempting to reduce wait times can reduce the quality of outcomes. For example, limiting hospital stays to control expenses may lead to higher readmission rates, ultimately compromising patient outcomes. Similarly, increasing patient throughput without adequate staffing may lead to medical errors and burnout among healthcare workers.
Prioritizing Cost and Quality Over Speed: A focus on maintaining high-quality care while keeping costs manageable often results in increased wait times. Limited funding may restrict the availability of healthcare professionals and medical facilities, leading to delays in patient care. This trade-off is commonly seen in Canada’s single-payer healthcare system, where financial constraints limit the speed at which services can be delivered.

Recognizing these trade-offs is essential for making informed policy decisions. Healthcare leaders must continually assess where compromises are made and whether adjustments can improve overall system performance.

Opportunities for Improvement

While constraints exist, opportunities are plentiful to optimize healthcare delivery by leveraging innovation, process improvements, and strategic prioritization. Some key opportunities include:

Process Optimization: Applying principles from manufacturing, whether Lean, Six Sigma, or other continuous improvement tools, to healthcare operations can improve efficiency. I’d highly recommend Pascal Dennis’ book “Andy & Me and the Hospital” as an easy read for healthcare professionals who have yet to undertake this journey. However, most hospitals and organizations have focused on continuous improvement for decades. Streamlining administrative tasks, reducing unnecessary procedures, and optimizing patient flow can help reduce wait times and improve resource allocation.
Technology and Digital Health Solutions: IMHO, this is likely the biggest game-changer in the next few decades. Telemedicine, artificial intelligence, robotics, and electronic health records (EHRs) can improve access to care, reduce inefficiencies, and enhance patient outcomes. AI-assisted diagnostics can speed up the detection of diseases, while telehealth can lessen the burden on in-person clinics and hospitals. We will continue to see transformative shifts with technology over the next ten to thirty years.
Task Shifting and Workforce Optimization: Appropriately delegating tasks among healthcare providers can enhance efficiency. Nurse practitioners and physician assistants can take on roles traditionally reserved for doctors, allowing physicians to focus on complex cases. This approach can improve access to care without significantly increasing costs.
More Public-Private Collaboration: Here is where I’ll now address the elephant in the room. While much of Canada’s healthcare system is publicly funded, more strategic partnerships with private healthcare providers can alleviate some constraints. I believe we’re oversimplifying things if we don’t acknowledge that the overall Canadian healthcare system is a public-private partnership today. Many services today (some lab tests, medications, eye exams and glasses, dental checkups) aren’t covered by government funding, and require 3rd party coverage, or you pay out of your own pocket. The term “universal” healthcare is a bit of a misnomer. Yes, basic medical services are covered for everyone, but not all required services are covered. What else can we do? Leveraging more partnerships is a valid approach. For example, contracting out non-emergency procedures to private clinics may help reduce wait times without overwhelming public hospitals. If we ignore the political nature of this topic, and if some individuals or services can be served through private partnerships, that will free up capacity (and reduce wait times) for those in the public stream. The entire system does need to be looked at holistically, without changing many of the fundamentals, to provide the best healthcare for the most significant portion of the population.
Preventive Care and Population Health Management: Investing in preventive care, such as vaccinations, chronic disease management programs, and health education, can reduce long-term healthcare costs by preventing severe conditions from developing. A proactive approach to health can ultimately reduce demand on the system.

Prioritization: Finding the Right Balance

Given the inherent constraints, healthcare systems must make strategic decisions about which areas to prioritize. A balanced approach might include:

Short-Term Focus: Reducing wait times through targeted funding for high-demand specialties and surgical procedures, improving operational efficiencies, and expanding telemedicine services.
Mid-Term Focus: Enhancing workforce training and retention to maintain quality care while managing costs. Implementing digital health solutions to improve efficiency.
Long-Term Focus: Shifting towards preventive care models and health promotion strategies to reduce the future burden on the healthcare system. Leveraging technology in ways either in the early development phases or had not been thought possible (yet).

While perfect equilibrium between cost, speed, and quality is unattainable, an evidence-based approach to prioritization can help mitigate negative trade-offs. Decision-makers should use healthcare data and performance metrics to ensure that the constraints are managed to maximize overall system effectiveness. Healthcare has no shortage of data; it’s critical to mine and analyze it correctly for the most significant benefit to the population.

The interdependency of cost, speed, and quality in Canadian healthcare mirrors similar constraints in manufacturing, project management, and other structured processes. While trade-offs are inevitable, strategic improvements in efficiency, technology adoption, and prioritization can help navigate these challenges. By acknowledging the existence of these constraints and actively working to optimize within them, healthcare leaders can enhance patient care while ensuring sustainability in the system. As in production environments, applying process thinking, automation, and advanced tools to healthcare can yield significant benefits if we embrace the mindset shift needed to make it happen.