Impacts of a New Episode-Based Payment Scheme on Volume, Expenditures, and Efficiency in Public Hospitals: A Quasi-Experimental Interrupted Time-Series Study in Jinhua, China

Does capitation payment influence healthcare service behavior in county medical community? Evidence from patients with diabetes in rural China

OBJECTIVE

Amid efforts to develop primary healthcare, China has been working to establish an integrated care system through the county medical community model, incorporating capitation payment to improve chronic disease management. This study investigates the impact of capitation payment reform on diabetes-related healthcare service behaviors across different levels of healthcare facilities within the county medical community.

METHODS

We conducted interrupted time series analysis to evaluate the changes in healthcare service behavior before and after the implementation of the capitation model. Using F County, as the sample area, we collected outpatient reimbursement records of type 2 diabetes mellitus (T2DM) patients from six townships that initiated reform in April 2015. The dataset, covering January 2014 to December 2019, includes 49,326 records from primary healthcare facilities and 1,628 from county hospitals, with information on medical costs, service items, and other details.

RESULTS

Following the implementation of capitation, both the average medical costs per visit and proportion of examination and testing costs showed a deceleration in growth in primary healthcare facilities (-0.615, p < 0.05; -1.554, p < 0.01). The proportion of medication costs, the proportion of insulin or combination therapy and the average number of medications exhibited a significant downward trend prior to the reform, while all reversed to upward trends after reform. In county hospitals, the proportion of medication costs increased by 19.115% immediately post-reform, and both the level and slope of average number of medications significantly rose (2.041, p < 0.01; 0.244, p < 0.01). Although the proportion of examination and testing costs increased before the reform, both the instantaneous level and the trend declined afterward (-19.684, p < 0.05; -1.833, p < 0.05).

CONCLUSIONS

In the sample area, the average medical costs for T2DM outpatients were effectively controlled after the capitation reform. Township health centers showed improved standardization in prescribing practices, while county hospitals focused more on comprehensive examinations and testing services. Medication prescription intensity increased across all facilities, contributing to enhanced chronic disease management.

Impact of a new case-based payment scheme on volume distribution across public hospitals in Zhejiang, China: does 'Same disease, same price' matter

BACKGROUND

With the implementation of the hierarchical medical system (HMS) in China, Zhejiang Province introduced an innovative payment scheme called "payment method by disease types with point counting". This scheme was initially adopted in Jinhua in July 2017, and was later integrated with the "same disease, same price" policy in Hangzhou in January 2020. This study aimed to investigate the impact of these reforms on the distribution of health service volume.

METHODS

Data were obtained from 104 hospitals, including 12 tertiary and 14 secondary hospitals from each of four regions: Jinhua (intervention) vs. Taizhou (control), and Hangzhou (intervention) vs. Ningbo (control). A total of 3848 observation points were examined using two sets of controlled interrupted time series analyses to assess the effects of this new case-based payment, without and with "same disease, same price", on the proportion of discharges, total medical revenue and hospitalization revenue. The Herfindahl-Hirschman Index (HHI) were analyzed to evaluate changes in market competition.

RESULTS

Following the introduction of the new case-based payment without "same disease, same price", secondary hospitals in Jinhua experienced a significant decline in the proportion of discharges (β6 = -0.1074, p = 0.047), total medical revenue (β6 = -0.0729, p = 0.026), and hospitalization revenue (β6 = -0.1062, p = 0.037) compared to those in Taizhou, while tertiary hospitals showed a non-significant increase. After incorporating "same disease, same price", the proportion of discharges (β6 = 0.2015, p = 0.031), total medical revenue (β6 = 0.1101, p = 0.041) and hospitalization revenue (β6 = 0.1248, p = 0.032) in Hangzhou's secondary hospitals increased compared with Ningbo's, yet the differences in both the level and trend changes between tertiary hospitals in the two cities were not statistically significant. The HHI in Jinhua (β7 = 0.0011, p = 0.043) presented an upward trend during the pilot period of the case-based payment, while the HHI in Hangzhou (β6 = -0.0234, p = 0.021) decreased immediately after the introduction of "same disease, same price".

CONCLUSION

This new case-based payment scheme may worsen the disproportionate distribution of service volume across hospitals of different levels. While "same disease, same price" shows potential benefits, further evidence is needed to assess its effectiveness in promoting HMS. Policymakers should consider hospital interests in payment design and address unintended strategic behaviors.

Impact of diagnosis-related group payment on medical expenditure and treatment efficiency on people with drug-resistant tuberculosis: a quasi-experimental study design

BACKGROUND

The severe health challenge and financial burden of drug-resistant tuberculosis (DR-TB) continues to be an impediment in China and worldwide. This study aimed to explore the impact of Diagnosis-related group (DRG) payment on medical expenditure and treatment efficiency among DR-TB patients.

METHODS

This retrospective cohort study included all DR-TB patients from the digitized Hospital Information System (HIS) of Wuhan Pulmonary Hospital and the TB Information Management System (TBIMS) with completed full course of National Tuberculosis Program (NTP) standard treatment in Wuhan from January 2016 to December 2022, excluding patients whose treatment spanned both before and after the DRG timepoint. These patients are all receiving standardized treatment specified by the NTP in designated tuberculosis hospitals. We performed the difference-in-differences (DID) model to investigate 6 primary outcomes. The cost-shifting behaviors were also examined using 4 outpatient and out-of-pocket (OOP) indicators. In the DID model, the baseline period is set from January 2016 to December 2020 before the DRG payment reform, while the treatment period is from January 2021 to December 2022. The payment reform only applied to individuals covered by Wuhan Municipal Medical Insurance, so the treatment group consists of patients insured by this plan, with other patients serving as the control group.

RESULTS

In this study, 279 patients were included in the analysis, their average treatment duration was 692.79 days. We found the DRG payment implementation could effectively reduce the total medical expenditure, total inpatient expenditure, and inpatient expenditure per hospitalization by 28636.03RMB (P < 0.01), 22035.03 RMB (P < 0.01) and 2448.00 RMB (P < 0.05). We also found a reduction in inpatient frequency and inpatient length of stays per hospitalization by 1.32 and 2.63 days with significance. The spillover effects of the DRG payment on outpatient and OOP expenditure were statistically insignificant.

CONCLUSIONS

The DRG payment method can effectively control the increase of DR-TB patients' medical expenditure and improve treatment efficiency with the guarantee of care quality. Furthermore, there was no evidence of spillover effects of DRG payment on outpatient and out-of-pocket expenditures.

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

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.

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

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.

The Impact of DRG-Based Payment Reform on the Efficiency of Medical Care for Patients with Myocardial Infarction: Evidence from Georgia

In Georgia, a prospective financing system for hospital services using diagnosis-related groups (DRGs) was introduced in 2022 to increase the efficiency and transparency of the healthcare system. The purpose of this study is to evaluate the impact of DRG-based hospital reimbursement on the efficiency of medical care for patients with myocardial infarction. Hospitalization data from three large hospitals in Georgia before and after the introduction of DRGs, covering the period from 2021 to 2024, were analyzed. The study found that the implementation of DRGs in cardiology hospitals reduced length of stay, readmission, and mortality rates. Although the prices for nosologies have increased, patients' direct out-of-pocket payments have decreased, thereby improving financial access to medical services. The introduction of the DRG payment system had a positive effect on patient financial accessibility.

New Evidence of the Impact of the National Drug Price Negotiation Policy on the Availability, Utilization, and Cost of Anticancer Medicines in China: An Interrupted Time Series Study

Purpose

The increasing global burden of cancer has become a significant challenge for public health. The Chinese government introduced the National Drug Price Negotiation (NDPN) policy with the goal of lowering the prices of innovative drugs and enhancing their accessibility. This study aims to evaluate the impact of the 2021 NDPN policy on the availability, utilization, and cost of anticancer medicines in China.

Methods

Data was gathered from 1519 hospitals between April 2021 and December 2022, with a focus on eight anticancer drugs affected by the 2021 NDPN policy. The availability, Defined Daily Doses (DDDs), and cost per Defined Daily Dose (DDDc) before and after the intervention were evaluated through interrupted time series analysis.

Results

The NDPN policy resulted in a substantial 5.10% increase in the availability of anticancer drugs (p < 0.001). Utilization also experienced a significant surge, with an immediate increase of 11,254.36 DDDs (p < 0.001) and a monthly increase of 1208.28 DDDs (p < 0.001) following policy implementation. The DDDc decreased by US$ 111.00 (p < 0.001) immediately after the policy. Disparities in regional drug utilization were evident, with higher usage in the eastern region.

Conclusion

The 2021 NDPN policy has notably enhanced the availability and utilization of anticancer medications in China while reducing their cost, in line with the policy's objectives. However, continuous monitoring is essential to ensure sustained access and to tackle regional disparities in drug utilization.

Does the Diagnosis-Intervention Packet Payment Reform Impact Medical Costs, Quality, and Medical Service Capacity in Secondary and Tertiary Hospitals? A Difference-in-Differences Analysis Based on a Province in Northwest China

Purpose

To control medical costs and regulate the behavior of providers, China has formed an original widely piloted case-based payment under the regional global budget, called the Diagnosis-Intervention Packet (DIP). This study aimed to evaluated the impact of the DIP payment reform on medical costs, quality of care, and medical service capacity in a less-developed pilot city in Northwest China.

Patients and Methods

We used the de-identified case-level discharge data of hospitalized patients from January 2021 to June 2022 in pilot and control cities located in the same province. We performed difference-in-differences (DID) analysis to examine the differential impact of the DIP reform for the entire sample and between secondary and tertiary hospitals.

Results

The DIP payment reform resulted in a significant decrease of total expenditure per case in the entire sample (5.5%, P < 0.01) and tertiary hospitals (9.3%, P < 0.01). In-hospital mortality rate decreased significantly in tertiary hospitals (negligible in size, P < 0.05), as did all-cause readmission rate within 30 days in the entire sample (1.1 percentage points, P < 0.01) and secondary hospitals (1.4 percentage points, P < 0.01). Proportion of severe patients increased significantly in the entire sample (1.2 percentage points, P < 0.05) and tertiary hospitals (2.5 percentage points, P < 0.01). We did not find the DIP reform was associated with a significant change in relative weight per case.

Conclusion

The DIP payment reform in the less-developed pilot city achieved short-term success in controlling medical costs without sacrificing the quality of care for the entire sample. Compared with secondary hospitals, tertiary hospitals experienced a greater decline in medical costs and received more severe patients. These findings hold lessons for less developed countries or areas to implement case-based payments and remind them of the variations between different levels of hospitals.

The Effects of the Multi-Hospital Global Budget Payment on Medical Expenditure and Service Volume: The Evidence from Dangyang County, China

Background

Global budget payment is currently the prevailing payment strategy internationally. In China, the concept of multi-hospital global budget payment has been proposed with the aims of achieving cost control effects while also encouraging hospital collaboration and optimising allocation of healthcare resources. This study seeks to analyse the impact of multi-hospital global budget payment in China on healthcare expenditure and service volume.

Materials and Methods

A retrospective comparative study was carried out in Dangyang County, China. The exposure cases were migrants who were not locally registered in the residence registration system. The study period encompassed January 1, 2017, to December 31, 2019. Including 3,246,164 outpatient medical records and 242,685 inpatient medical records. The key variables are medical expenditure and service volume indicators. Continuous variables were reported as mean and tested by t-test. We used interrupted time series analysis models to estimate the changes in the level and trend of each outcome measure after the policy.

Results

After the outpatient global budget payment reform, the monthly medical expenditure of the hospital alliance has transitioned from a discernible upward trajectory to a deceleration in the rate of growth. The outpatient volume in public and private high-level hospitals decreased at a rate of -419.26 person/month and -137.04 person/month, respectively. In terms of inpatient service volume, only private high-level hospitals reported a decrease, with a reduction rate of -15.38 individuals per month.

Conclusion

This study presents new evidence demonstrating that the multi-hospital global budget payment can effectively control costs and promote resource reallocation when implemented jointly with hospital alliance policies. However, overly lenient budget caps risk counterproductive effects.

Impacts of DRG-Based Prepayment Reform on the Cost and Quality of Patients with Neurologic Disorders: Evidence from a Quasi-Experimental Analysis in Beijing, China

Purpose

As one of the pioneering pilot cities in China's extensive Diagnosis Related Groups (DRG) -based prepayment reform, Beijing is leading a comprehensive overhaul of the prepayment system, encompassing hospitals of varying affiliations and tiers. This systematic transformation is rooted in extensive patient group data, with the commencement of actual payments on March 15, 2022. This study aims to evaluate the effectiveness of DRG payment reform by examining how it affects the cost, volume, and utilization of care for patients with neurological disorders.

Patients and Methods

Utilizing the exogenous shock resulting from the implementation of the DRG-based prepayment system, we adopted the Difference-in-Differences (DID) approach to discern changes in outcome variables among DRG payment cases, in comparison to control cases, both before and following the enactment of the DRG policy. The analytical dataset was derived from patients diagnosed with neurological disorders across all hospitals in Beijing that underwent the DRG-based prepayment reform. Strict data inclusion and exclusion criteria, including reasonableness tests, were applied, defining the pre-reform timeframe as March 15th through October 31st, 2021, and the post-reform timeframe as the corresponding period in 2022. The extensive dataset encompassed 53 hospitals and encompassed hundreds of thousands of cases.

Results

The implementation of DRG-based prepayment resulted in a substantial 12.6% decrease in total costs per case and a reduction of 0.96 days in length of stay. Additionally, the reform was correlated with significant reductions in overall in-hospital mortality and readmission rates. Surprisingly, the study unearthed unintended consequences, including a significant reduction in the proportion of inpatient cases classified as surgical patients and the Case Mix Index (CMI), indicating potential strategic adjustments by providers in response to the introduction of DRG payments.

Conclusion

The DRG payment reform demonstrates substantial effects in restraining cost escalation and enhancing quality. Nevertheless, caution must be exercised to mitigate potential issues such as patient selection bias and upcoding.

Does a new case-based payment system promote the construction of the ordered health delivery system? Evidence from a pilot city in China

BACKGROUND

The construction of the ordered health delivery system in China aims to enhance equity and optimize the efficient use of medical resources by rationally allocating patients to different levels of medical institutions based on the severity of their condition. However, superior hospitals have been overcrowded, and primary healthcare facilities have been underutilized in recent years. China has developed a new case-based payment method called "Diagnostic Intervention Package" (DIP). The government is trying to use this economic lever to encourage medical institutions to actively assume treatment tasks consistent with their functional positioning and service capabilities.

METHODS

This study takes Tai'an, a DIP pilot city, as a case study and uses an interrupted time series analysis to analyze the impact of DIP reform on the case severity and service scope of medical institutions at different levels.

RESULTS

The results show that after the DIP reform, the proportion of patients receiving complicated procedures (tertiary hospitals: β3 = 0.197, P < 0.001; secondary hospitals: β3 = 0.132, P = 0.020) and the case mix index (tertiary hospitals: β3 = 0.022, P < 0.001; secondary hospitals: β3 = 0.008, P < 0.001) in tertiary and secondary hospitals increased, and the proportion of primary-DIP-groups cases decreased (tertiary hospitals: β3 = -0.290, P < 0.001; secondary hospitals: β3 = -1.200, P < 0.001), aligning with the anticipated policy objectives. However, the proportion of patients receiving complicated procedures (β3 = 0.186, P = 0.002) and the case mix index (β3 = 0.002, P < 0.001) in primary healthcare facilities increased after the reform, while the proportion of primary-DIP-groups cases (β3 = -0.515, P = 0.005) and primary-DIP-groups coverage (β3 = -2.011, P < 0.001) decreased, which will reduce the utilization efficiency of medical resources and increase inequity.

CONCLUSION

The DIP reform did not effectively promote the construction of the ordered health delivery system. Policymakers need to adjust economic incentives and implement restraint mechanisms to regulate the behavior of medical institutions.

County Hospital Responses to Funding Reforms in Zhejiang, China: An Interrupted Time-Series Analysis

This study aimed to assess the effects of a two-stage funding reform, involving DRGs-based (Diagnostic Related Groups) payments for inpatient care and capitation funding for outpatient care, respectively, on services volume and care expenditure of county hospitals in Zhejiang province, China. A quasi-experimental design was adopted, involving 6 hospitals from 2 counties in the intervention group and 12 hospitals from 5 counties in the control group. The DRGs-based payments for inpatient care and capitation funding for outpatient care were introduced in January 2018 and January 2019, respectively. Controlled interrupted time-series analyses were performed to determine the effects of the funding reforms using monthly data over the period from January 2017 to December 2019. The volume of inpatient care decreased after the introduction of the first-stage DRGs-based payments, which was accompanied by an increase in the volume of outpatient visits. The DRGs-based payments led to a reduction of on average 1390 Yuan total expenditure per episode of inpatient care and 1116 Yuan out-of-pocket (OOP) payment per episode of inpatient care. However, the average outpatient expenditure per visit increased. So did the corresponding OOP payment per outpatient visit. The introduction of the second-stage capitation funding for outpatient care reversed the increasing trend of outpatient care. The average expenditure and OOP payment per outpatient visit decreased. The funding reforms create a significant effect on service volumes and expenditures in county hospitals. A coordinated approach to both inpatient and outpatient funding mechanisms is needed to minimize cost-shifting between inpatient and outpatient care and to achieve the intended policy outcomes.

A Bibliometric Analysis of Diagnosis Related Groups from 2013 to 2022

Purpose

As an important management method of the global healthcare system, diagnosis related groups (DRGs) classify patients into different cost groups and pay more attention to the equitable distribution of medical resources and the quality of medical services. At present, most countries have used DRGs to help medical institutions and doctors to treat patients more accurately, avoid the waste of medical resources, and improve treatment efficiency.

Methods

The Web of Science database was searched to collect all relevant literature on DRGs from 2013 to 2022. The literature information was imported into CiteSpace, Vosviewer, and Histcite for data analysis and visualization of the results. Analyze the cooperative relationship among the countries, institutions, journals, and authors. The usage trend of keywords; Highlight the content of the cited articles.

Results

The number of articles published in this decade was stable, and the number of citations in 2014 was the highest. The United States and Germany, as the first countries to use the DRGs system, are ahead of other countries in terms of the number and quality of articles. We have carried out content research on the articles with high citations, and summarized the application range of DRGs; classification method; advantages and disadvantages of the application. In general, the development trend of DRGs in foreign countries is to continuously optimize the classification method, expand the scope of application, and improve the application effect. These provide support and reference for the improvement of medical services and the perfection of the medical insurance system.

Conclusion

The application of DRGs can improve the quality and efficiency of medical services, and reduce the waste of medical expenses. It can also promote the rational allocation of medical resources and the equity of medical services. In the future, DRGs will pay more attention to the personalized diagnosis and treatment and fine management of patients, and the sharing and standardization of medical data, to promote the development of medical informatization.

Impacts of Outpatient Payment Reforms on Volume and Expenditures in Public Hospitals: Evidence from a Quasi-Experimental Analysis in Zhejiang, China

Purpose

China developed an innovative episode-based payment scheme for outpatient care, namely "Ambulatory Patient Groups (APGs) + capitation" payment, to constrain inflation in outpatient expenditures. This study aimed to assess the effects of this payment method on volume and expenditures in Chinese public hospitals.

Methods

A quasi-experimental study was conducted with 7 municipal and 12 county hospitals from Jinhua as the intervention group and 15 municipal and 24 county hospitals from three neighbouring cities as the control group. The payment reform was introduced to municipal and county hospitals in the intervention group in January 2020 and January 2021, respectively. Monthly data on volumes and outpatient expenditures were collected from each hospital from January 2019 to December 2021. Controlled interrupted time-series analyses were performed to determine the effects of the funding reforms.

Results

Outpatient visits in municipal hospitals decreased by 1417.54 (p=0.048) per month on average compared with control ones after the reform was implemented, whilst that in county hospitals increased by 1058.04 (p=0.041) per month on average. The trend of drug expenditures (β 7=-1.41, p=0.019) in municipal hospitals dropped, which was accompanied by an immediate reduction in consumable expenditures (β 6 =-6.89, p=0.044). The funding reform also led to the significant declines in drug (β 6=-10.96, p=0.009) and consumable (β 6=-4.78, p=0.041) expenditures in county hospitals. Municipal hospitals experienced the drop in the trend of total outpatient expenditures (β 7=-3.99, p=0.018) over the same period.

Conclusion

The strength of the "AGPs + capitation" payment for outpatient care lies in its ability to control the excessive growth of medical expenses through correcting inappropriate incentives. However, minimising potential cost-shifting and risk-shifting to uninsured service items should be given attention.