Impacts of the diagnosis-intervention packet reform on costs and healthcare resource utilization : evidence from Guangzhou, China

Background The diagnosis-intervention packet (DIP) payment reform, utilizing big data for patient classification and payment standardization, was initially developed and piloted in China. Guangzhou, the pilot mega-city, rolled out DIP payment reform in 2018 to regulate medical expenditures. We estimated the impacts of DIP on costs and healthcare resource utilization in Guangzhou using a nine-year panel data set of Guangzhou and other regions between 2018 and 2020. Methods By employing the synthetic difference-in-difference (SDID) method, we captured changes in outcome variables before and after DIP implementation in Guangzhou and non-reforming regions. Results DIP payment reform increased per-episode inpatient costs by CNY 1574.735 (95% CI: 148.330 to 3001.140, P < 0.05), CNY 1583.413 (95% CI: 247.356 to 2919.470, P < 0.05), and CNY 1448.065 (95% CI: -132.051 to 3028.181.140, P < 0.1) among all hospitals, public hospitals, and private hospitals, respectively. In contrast, DIP had little effect on the average length of stay (LOS) among all hospitals from 2018 to 2020. Although DIP did not impact in-hospital mortality (IHM) overall, it increased IHM by 0.330 percentage points (95% CI: 0.008 to 0.652, P < 0.05) and 0.311 percentage points (95% CI: 0.158 to 0.463, P < 0.01) among private hospitals and secondary hospitals. Conclusions Our results suggest that the effects of DIP payment reform were mixed. While it did increase healthcare costs, its impacts on quality and operation efficiency varied significantly across different types of hospitals.