Managing a community mental health agency: A Theory of Constraints based framework

Abstract

The Theory of Constraints (TOC) is a powerful new management philosophy that recognizes system constraints limit the performance of a system and proposes a set of concepts to manage the constraints. TOC management philosophy (i) suggests the goal of an organization is to make money without violating certain necessary conditions such as customer satisfaction and employee satisfaction and security; (ii) proposes three performance measures: throughput, inventory, and operating expenses; and (iii) improves the process by focusing improvement efforts on its weakest link or constraint. Although originally developed for manufacturing operations, TOC appears to be equally applicable to service operations, including health delivery systems such as Community Mental Health Centres (CMHCs). In this article, we report on a TOC-based operations analysis of a Chemical Dependency (CD) unit within a Midwest community mental health system and implementation of recommended changes. TOC performance measures encourage finding innovative ways of increasing throughput and reducing inventory instead of simply cutting or containing costs for the CD Unit. The TOC-based improvement process, using the Five Focusing Steps, reveals multiple physical and policy constraints within both the CD Unit and the agency as a whole. Based upon this analysis, we offer specific recommendations that should significantly improve resource utilization, revenues, patient care, and employee satisfaction. Most of these recommendations require little or no net costs to implement. By using the TOC approach outlined in this article, other CMHCs and health delivery systems can realize similar benefits.