Objectives: To evaluate the economic implications of payments based on Chinese diagnosis-related groups for critically ill patients in ICUs in terms of total hospital expenditure, out-of-pocket payments, and length of stay. Design: A pre-post comparison of patient cohorts admitted to ICUs 1 year before and 1 year after Chinese diagnosis-related group reform was undertaken. Demographic characteristics, clinical data, and medical expenditures were collated from a health insurance database. Setting: Twenty-two public hospitals in Sanming, Southern China. Patients: All patients admitted to ICUs from January 1, 2017, to December 31, 2018. Intervention: The implementation of Chinese diagnosis-related group–based payments on January 1, 2018. Measurements and Main Results: Economic variables (total expenditures, out-of-pocket payments, and length of stay) were calculated for each patient from the day of hospital admission to the day of hospital discharge. Adjusted mean out-of-pocket payment estimates were 29.46% (p < 0.001) lower following reform. Adjusted mean out-of-pocket payments fell by 41.32% for patients in neonatal ICU, whereas there were no significant decreases in out-of-pocket payments for patients in PICU and adult ICU. Furthermore, adjusted mean out-of-pocket payments decreased by 55.74% in secondary hospitals, but there was no significant change in tertiary hospitals after Chinese diagnosis-related group reform. No significant changes were found in total expenditures and length of stay. Conclusions: Chinese diagnosis-related group policy provided an opportunity for critically ill patients in ICUs to achieve at least short-term financial benefits in reducing out-of-pocket payments, without affecting the total expenditures and length of stay. Chinese diagnosis-related group–based payment significantly relieved financial burdens for patients with lower illness severities, such as patients in neonatal ICU. The results of this study can offer significant insights for policymakers in reducing the financial burden on critically ill patients, both in China and in other countries with similar systems.

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To test the driving effect of China’s tax and fee reduction policies on independent innovation, we established a model of Dynamic Spatial Durbin (SDM) and introduced DMSP/OLS night lighting data and Malmquist productivity index for partial differential decomposition. We found that: (1) Affected by the tax and fee reduction policies, the local province tends to increase the level of independent innovation in the short term, while neighboring provinces tend to purchase and rely on foreign technology; (2) In the long term, the tax and fee reduction policies do not significantly increase the level of independent innovation in local and neighboring regions; (3) There is a strategic choice behavior of local government between political promotion incentives and promoting independent innovation; (4) The policy externality of tax reduction and fee reduction has a two-way feedback effect. We conclude that: (1) The spatial agglomeration characteristics of tax and fee reduction policies require the government to fully consider the local innovation and economic foundation, and break the resource endowment of administrative divisions; (2) The spatial feedback feature of the tax and fee reduction policies requires the government to focus on the two-way interaction of independent innovation in the adjacent regions, rather than just one-way assistance, imitation and learning; (3) The spatial lag characteristics of tax and fee reduction policies require the government to establish a accountability system or life-long system for innovative performance evaluation. Moreover, the study fails to provide causality evidence from the spatial agglomeration and spatial time-delay.