AUTHOR=Huang Xiao , Zhu Jinyun , Zhang Jinghua 

TITLE=Impacts of DRG point-based payment system on healthcare resource utilization and provider behavior: a pilot quasi-experimental study in China

JOURNAL=Frontiers in Public Health

VOLUME=Volume 13 - 2025

YEAR=2025

URL=https://www.frontiersin.org/journals/public-health/articles/10.3389/fpubh.2025.1678259

DOI=10.3389/fpubh.2025.1678259

ISSN=2296-2565

ABSTRACT=BackgroundDeveloping countries commonly face challenges regarding budget constraints and inadequate cost-accounting capabilities during the implementation of a Diagnosis-Related Group (DRG) payment system. China has initiated pilot reforms of the Diagnosis-Related Group point-based payment system (DRG-PBPS) in 40 cities. DRG-PBPS, using historical cost data, integrates global budgeting with case-based point-weighted payments. In this study, its impact on inpatient resource utilization is evaluated and potential strategic behaviors of healthcare providers are examined.MethodsUsing administrative data from 15,744 inpatient records of cerebral infarction cases from January 2018 to December 2022 in a Chinese city, this study uses a difference-in-differences (DID) approach to evaluate the effects of the DRG-PBPS reform on hospitalization costs and length of stay. Both the changes in the Charlson Comorbidity Index (CCI) score and 14-day, 30-day, and 90-day readmission rates between the reform and control groups were compared before and after implementation to assess whether providers were involved in patient selection and premature discharge.ResultsAfter DRG-PBPS implementation, hospitalization costs decreased by 9.7% (p < 0.01), and length of stay decreased by 6.5% (p < 0.05). No significant changes were observed in CCI or 14-day and 90-day readmission rates, whereas 30-day readmissions fell by 2.0% (p < 0.05). These findings were robust across multiple sensitivity analyses, and the estimated effects of DRG-PBPS were broadly consistent across hospitals of different levels.ConclusionThe implementation of DRG-PBPS significantly reduced inpatient resource utilization without inducing adverse provider behavior. China’s pilot practice illustrates that the DRG-PBPS serves as an effective alternative to the fee-for-service model. For developing countries with constrained budgets and underdeveloped cost-accounting systems, DRG-PBPS provides a feasible strategy for adopting DRG-based payment systems in inpatient care.