The impact of an innovative payment method on medical expenditure, efficiency, and quality for inpatients with different types of medical insurance: evidence from a pilot city, China

Background China is striving to promote a hierarchical medical system (HMS) to improve the efficiency of health resource utilization and ensure health equity. An innovative payment scheme named the “Diagnosis-Intervention Package” (DIP) has been developed recently and implemented in 71 pilot cities nationwide. Although the impact of payment reform on medical expenditure and provider behavior has been demonstrated, there is little evidence on whether the reform promotes the HMS. Methods This study uses evolutionary game theory to formulate a tripartite evolutionary game model involving the local government (LG), superior medical institutions (SMI), and patients in implementing DIP payment reform. We also analyze the stability of each participant’s strategy and the sensitivity of parameters. Results The results show that for LG, the additional social benefits created for other regions are crucial in influencing the evolution of the game system. SMI are more inclined to support the HMS when the proportion of patient reduction under the DIP payment scheme is low. For patients, the perceived medical quality of primary medical institutions (PMI) is the decisive factor in their strategies. Conclusion The DIP payment scheme is more likely to promote the HMS in regions with an advanced policy framework, abundant medical resources, and high-quality primary medical services. Policymakers need to create effective incentives to boost support for the HMS from each participant. This study provides a feasible methodology for analyzing the impact of payment reforms that can be used in future research.

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Evaluation of the effect of DRG payment policy based on interrupted time series modeling: evidence from a tertiary hospital in Anhui Province

Mo,

Zhu,

Fang

et al. 2024

Health Res Policy Sys

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Background The payment methodology for diagnosis-related groups (DRG) has implications for both society and medical institutions. Our study aims to analyse the impact of the reform of the payment policy according to the DRG on the operation of a tertiary hospital in Anhui Province. Methods Monthly data were collected from April 2020 to September 2023 during the reform period for a tertiary hospital on nine types of operational indicators, including average length of stay (ALOS), number of discharges, number of outpatient visits, percentage of discharged patients undergoing level III or IV surgery, bed turnover rate, inpatient essential drug utilization rate, low-risk group mortality, outpatient subaverage cost and inpatient subaverage cost. The data were divided into two phases according to the time of DRG implementation: pre-reform (April 2020–December 2021) and post-reform (January 2022–September 2023), and the segmented regression model with interrupted time series data was used to analyse the changes in the trend of each type of indicator before and after the reform. Statistical analysis was performed using R software (4.3.1). Results After the implementation of the DRG, the number of discharges increased by 112 800 patients (95% confidence interval [CI] 31.125–194.484, P = 0.008), the bed turnover rate rose by 1.403% (95% CI 1.028–1.778, P = 0.022) and the percentage of discharged patients undergoing level III or IV surgery decreased by 0.098% (95% CI −0.181 to −0.015, P = 0.022). The low-risk group mortality decreased by 0.016% (95% CI −0.027 to −0.005, P = 0.007), and the inpatient subaverage cost decreased by 81.514 CNY (95% CI −121.782 to −41.245, P < 0.001). However, there were no significant differences in the trends of average length of stay, outpatient visits, inpatient essential drug utilization rate and outpatient subaverage cost after the DRG implementation. Conclusions The findings show that the DRG reform has positively impacted hospital functioning, including quality, safety, efficiency and costs. Although the average length of stay remained unchanged, there was an increase in discharged patients and outpatient visits, indicating hospitals adapted to the new payment model. The reduction in low-risk group mortality suggests improvements in patient safety and care quality. However, challenges remain, as evidenced by decreased surgical complexity and initial drops in bed turnover rates. While the DRG reform holds promise for enhancing healthcare efficiency and controlling costs, potential negative effects such as patient selection bias and coding changes need to be monitored. Future research should focus on the long-term effects of the DRG policy across different healthcare institutions.

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The impact of an innovative payment method on medical expenditure, efficiency, and quality for inpatients with different types of medical insurance: evidence from a pilot city, China

Cited by 5 publications

References 42 publications

Comparison of Diagnosis-Related Group Rehabilitation Reimbursement Payments With Those of a Novel Patient Classification-Based Payment System

Comparison of Diagnosis-Related Group Rehabilitation Reimbursement Payments With Those of a Novel Patient Classification-Based Payment System

Does an innovative case-based payment scheme promote the hierarchical medical system? A tripartite evolutionary game analysis

Evaluation of the effect of DRG payment policy based on interrupted time series modeling: evidence from a tertiary hospital in Anhui Province

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