The Effects of Diagnosis‐Related Group Payments on Hospitalisation Costs, Length of Stay, and In‐Hospital Mortality: A Case Study in China

ABSTRACT Objective In this study, it was to evaluate the impact of diagnosis‐related group (DRG) payments on hospitalisation costs, length of stay (LOS), and in‐hospital mortality in Nanjing. Methods A quasi‐natural experiment was utilised. The intervention group consisted of patients enroled in the Urban Employee Basic Medical Insurance and Urban and Rural Resident Basic Medical Insurance programmes in Nanjing, while the other patients composed the comparison group. Interrupted time‐series analysis and difference‐in‐differences combined with propensity score matching were employed in this study. The analysis was based on a case‐level data set from a tertiary hospital between January 2021 and December 2022. Results The introduction of the DRG payment caused a 13.5% decrease in hospitalisation costs per admission for the intervention group compared with the comparison group. Furthermore, the intervention group exhibited a slight reduction in the LOS of 0.75 days in comparison to the comparison group. No significant changes were observed in care quality, as measured by in‐hospital mortality. Conclusion The DRG payment was effective in decreasing hospitalisation costs and length of stay. No compelling evidence was identified in terms of the changes in in‐hospital mortality. The evidence from China may also be valuable to other developing countries considering the adoption of DRG payments.