How do inpatient costs, length of stay, and quality of care vary after China's new case- based payment reform? An interrupted time series analysis

Background In 2022, China's National Healthcare initiated the Diagnosis-Intervention Packet (DIP) payment system, piloted in a southern city. This study aimed to evaluate the impact of the DIP payment reform on inpatients' costs, length of stay (LOS), and Diagnosis Related Groups (DRG) indexes at Hospital R. Methods The author collected discharge data of inpatients in a tertiary hospital in the city from 2019 to 2023. Using a Boston matrix and an interrupted time series model, the study comprehensively examined the influence of DIP payment reform pre- and post-implementation and compared the differences between surgical and non-surgical departments. Results 343,007 patients were included in this study, with 197,337 and 145,670 inpatients before and after the DIP payment reform. From 2019 to 2023, the inpatients' costs at R Hospital decreased yearly, and there was a shorter LOS. The DRG indexes, including Case-Mix Index (CMI), time consumption index, and cost efficiency index, were significantly optimized, and the number of departments with the time consumption index and cost efficiency index of less than one increased from 0 in 2019 to 18 in 2023. The changing trend of surgical departments was similar to that of the whole hospital. However, the time consumption index decreased significantly for non-surgical departments before and after the DIP payment reform. Conclusion After the DIP payment reform, Hospital R proactively enhanced internal management, adjusted clinical pathways to manage costs, and improved inpatient turnover efficiency, resulting in lower hospitalization costs, shorter lengths of stay, and better DRG indexes. The inconsistencies between surgical and non-surgical departments may be due to differences in the allocation of hospital resources.