Wenjuan Wang,1 Juanjuan Liang,1 Rong Fan,2 Yuanqing Cai,3 Baisong Yin,1 Yangyi Hu1 

1School of Government, Central University of Finance and Economics, Beijing, 100081, People’s Republic of China; 2Peking University Cancer Hospital & Institute, Beijing, 100142, People’s Republic of China; 3Chinese Academy of Social Sciences Evaluation Studies, Beijing, 100732, People’s Republic of China

Correspondence: Yangyi Hu, School of Government, Central University of Finance and Economics, 39 South College Road, Beijing, 100081, People’s Republic of China, Email yangyi.hu@outlook.com

Purpose: The medical–pharmaceutical separation (MPS) reform is a healthcare reform that focuses on reducing the proportion of drug expenditure. This study aims to analyze the impact of the MPS reform on hospitalization expenditure and its structure in tertiary public hospitals.
Methods: Using propensity score matching and multi-period difference-in-difference methods to analyze the impact of the MPS reform on hospitalization expenditure and its structure, a difference-in-difference-in-difference model was established to analyze the heterogeneity of whether the tertiary public hospital was a diagnosis-related-group (DRG) payment hospital. Of 22 municipal public hospitals offering tertiary care in Beijing, monthly panel data of 18 hospitals from July 2011 to March 2017, totaling 1242 items, were included in this study.
Results: After the MPS reform, the average drug expenditure, average Western drug expenditure, and average Chinese drug expenditures per hospitalization decreased by 24.5%, 24.6%, and 24.1%, respectively (P < 0.001). The proportions of drug expenditure decreased by 4.5% (P < 0.001), and the proportion of medical consumables expenditure increased significantly by 2.7% (P < 0.001).
Conclusion: The MPS reform may significantly optimize the hospitalization expenditure structure and control irrational increases in expenditure. DRG payment can control the tendency to increase the proportions of medical consumables expenditure after the reform and optimize the effect of the reform. There is a need to strengthen the management of medical consumables in the future, promote the MPS reform and DRG payment linkage, and improve supporting measures to ensure the long-term effect of the reform.

Keywords: diagnosis-related-group, provider payment reforms, healthcare expenditure, propensity-score-matching, difference-in-difference-in-difference, China