The complexity of organisations in the public sector, in comparison to those in the private sector, can make it difficult to transfer operations management practices and approaches. The adoption of systems-based improvement methodologies have been widely reported for industrial organisations and are increasingly popular in the public sector, notably in healthcare, as a means to improve productivity, cost and quality positions. Adaptation is however a major challenge facing contemporary healthcare management and while research on improvement in healthcare is extensive, most studies focus on distinct features of the system (such as waiting lists or operating room utilisation) rather than the system as a whole. This article presents a systems analysis of hospital healthcare in order to capture the dysfunctions in the existing system and more importantly understand their inter-relationships. Such a conceptualisation in this context remains absent from the literature but will be necessary for any healthcare organisation seeking systems level improvement. This article explicitly codifies the dysfunctions of the current system in a new framework, developed over 4 years of in-depth investigation that rectifies this shortcoming allowing practitioners, managers and policy makers to begin real systems improvement.