Impacts of Hospital Payment Based on Diagnosis Related Groups (DRGs) with Global Budget on Resource Use and Quality of Care: A Case Study in China

  • Suwei YUAN School of Public Health, Shanghai Jiao Tong University School of Medicine, Shanghai, China 2. China Hospital Development Institute, Shanghai Jiao Tong University, Shanghai, China
  • Wenwei LIU School of Philosophy, Law and Political Science, Shanghai Normal University, Shanghai, China
  • Fengqing WEI Department of Quality Control, Longhua Hospital, Shanghai University of Traditional Chinese Medicine, Shanghai, China
  • Haichen ZHANG School of Public Health, Shanghai Jiao Tong University School of Medicine, Shanghai, China
  • Suping WANG School of Public Health, Shanghai Jiao Tong University School of Medicine, Shanghai, China
  • Weijun ZHU School of Public Health, Shanghai Jiao Tong University School of Medicine, Shanghai, China
  • Jin MA School of Public Health, Shanghai Jiao Tong University School of Medicine, Shanghai, China
Keywords: Diagnosis-related-groups (DRGs, Global budget, Hospital payment reform, China


Background: China has implemented numerous pilots to shift its hospital payment mechanism from the traditional retrospective cost-based system to prospective diagnosis-related-group (DRG) -based system. This study investigated the impact of the DRG payment reform with global budget in Zhongshan, China. Methods: A total of 2895 patients diagnosed with acute myocardial infarction (AMI) were selected from local two largest tertiary hospitals, among which 727 were discharged prior to the payment reform and 2168 afterwards. Difference-in-difference (DID) regression models were used to evaluate the policy effects on patients’ percutaneous coronary intervention (PCI) use, hospital expenditures, in-hospital mortality, and readmission rates within 30 days after discharge. Results: Patients’ PCI use and hospital expenditures increased quickly after the payment reform. With patients with no local insurance scheme as reference, PCI use for local insured patients decreased significantly by 4.55 percent (95 percent confidence interval [CI]: 0.23, 0.72), meanwhile the total hospital expenses decreased significantly by US$986.10 (b=-0.15, P=0.0037) after reform. No changes were observed with patients’ hospital mortality and readmission rates in our study. Conclusion: The innovative DRG-based payment reform in Zhongshan suggested a positive effect on AMI patient’s cost containment but negative effect on encouraging resource use. It had no impacts on patients’ care quality. Cost shifting consequence from the insured to the uninsured was observed. More evidence of the impacts of the DRG-based payment in China’s health scenario is needed before it is generalized nationwide.  


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How to Cite
YUAN S, LIU W, WEI F, ZHANG H, WANG S, ZHU W, MA J. Impacts of Hospital Payment Based on Diagnosis Related Groups (DRGs) with Global Budget on Resource Use and Quality of Care: A Case Study in China. Iran J Public Health. 48(2):238-246.
Original Article(s)