Sixian Du,1,2 Yaqing Liu,1,2 Chengfeng Yang,3 Yong Yang,3,4 Yiqing Yang3 

1School of Medicine and Health Management, Tongji Medical College, Huazhong University of Science and Technology, Wuhan, Hubei, People’s Republic of China; 2Huazhong University of Science and Technology’s Double First-Class Discipline Platform in Humanities (Research Center for Hospital High-Quality Development), Wuhan, Hubei, People’s Republic of China; 3Linxiang District People’s Hospital, Lincang, Yunnan, People’s Republic of China; 4Department of Cardiology, Union Hospital, Tongji Medical College, Huazhong University of Science and Technology, Wuhan, Hubei, People’s Republic of China

Correspondence: Yong Yang, Linxiang District People’s Hospital, Lincang, Yunnan, 677000, People’s Republic of China, Email rollin128@163.com Yiqing Yang, Linxiang District People’s Hospital, Lincang, Yunnan, 677000, People’s Republic of China, Email ynlcyyq@163.com

Background: This study evaluates the impact of the DRG-based payment reform pilot, initiated in January 2023, in an underdeveloped city in Southwest China. The reform’s implications are particularly relevant for resource-limited settings, where healthcare cost control and service efficiency are critical for improving patient care.
Purpose: This study aims to evaluate the impact of this reform on the inpatient service capacity, cost, and efficiency of the Neurology Department in the leading hospital within a county-level medical community.
Material and Methods: We conducted a controlled interrupted time series (ITS) analysis using monthly administrative data from January 2021 to June 2024, focusing on inpatients treated in the Neurology Department of M Hospital, A City, Yunnan Province. Eleven outcome indicators were assessed, including Total DRG Weight, Case Mix Index (CMI), Average Length of Stay (ALOS), and Average Inpatient Cost (measured in Renminbi, RMB). A comparable control group was used to strengthen causal inference.
Results: Following the DRG reform, the Neurology Department experienced a 32.37% increase in Total DRG Weight, a 12.21% rise in CMI, and an 8.94% increase in the number of DRG groups, while ALOS decreased by 9.85%. The ITS model revealed a significant upward trend in Total DRG Weight (trend change = 2.16, < 0.01) and a downward trend in ALOS (trend change = – 0.04, < 0.01). Additionally, the average inpatient cost declined significantly, with a trend reduction of 121.65 RMB per month ( < 0.01).
Conclusion: The implementation of DRG-based payment reform in A City was associated with enhanced inpatient service efficiency in the Neurology Department, including improved case complexity management, shorter hospital stays, and reduced costs. However, medical equipment-related expenses remained unaffected, potentially due to increasing patient severity and ongoing technology investments. These findings offer valuable evidence for policymakers aiming to optimize hospital performance through payment system reform in resource-limited settings.

Keywords: diagnosis-related groups, DRG, neurology, payment reform, resource-limited settings, health financing, interrupted time series design, ITS, health system reform