Send to

Choose Destination
Health Aff (Millwood). 2015 Oct;34(10):1745-52. doi: 10.1377/hlthaff.2015.0074.

Payment Reform Pilot In Beijing Hospitals Reduced Expenditures And Out-Of-Pocket Payments Per Admission.

Author information

Weiyan Jian ( is an associate professor in the Department of Health Policy and Management, School of Public Health, at Peking University, in Beijing, China.
Ming Lu is a lecturer in the Department of Medical Informatics, School of Basic Medicine, at Peking University.
Kit Yee Chan is a reader at the Centre for Global Health Research, Usher Institute of Population Health Sciences and Informatics, at the University of Edinburgh, in the United Kingdom.
Adrienne N. Poon is a medical resident in the Department of Internal Medicine, School of Medicine and Health Sciences, at the George Washington University, in Washington, D.C.
Wei Han is a researcher in the Blavatnik School of Government at the University of Oxford, in the United Kingdom.
Mu Hu is an associate professor in the Third Clinical Medical School at Peking University.
Winnie Yip is a professor in the Blavatnik School of Government at the University of Oxford.


In 2009 China announced plans to reform provider payment methods at public hospitals by moving from fee-for-service (FFS) to prospective and aggregated payment methods that included the use of diagnosis-related groups (DRGs) to control health expenditures. In October 2011 health policy makers selected six Beijing hospitals to pioneer the first DRG payment system in China. We used hospital discharge data from the six pilot hospitals and eight other hospitals, which continued to use FFS and served as controls, from the period 2010-12 to evaluate the pilot's impact on cost containment through a difference-in-differences methods design. Our study found that DRG payment led to reductions of 6.2 percent and 10.5 percent, respectively, in health expenditures and out-of-pocket payments by patients per hospital admission. We did not find evidence of any increase in hospital readmission rates or cost shifting from cases eligible for DRG payment to ineligible cases. However, hospitals continued to use FFS payments for patients who were older and had more complications than other patients, which reduced the effectiveness of payment reform. Continuous evidence-based monitoring and evaluation linked with adequate management systems are necessary to enable China and other low- and middle-income countries to broadly implement DRGs and refine payment systems.


China; DRG payment; Impact evaluation; Public Hospitals

[Indexed for MEDLINE]

Supplemental Content

Full text links

Icon for George Washington University, Himmelfarb Health Sciences Library, DC Icon for George Washington University, Himmelfarb Library
Loading ...
Support Center