The impact of an innovative payment method on medical expenditure, efficiency, and quality for inpatients with different types of medical insurance: evidence from a pilot city, China

Abstract

Background Since 2020, China has implemented an innovative payment method called Diagnosis-Intervention Packet (DIP) in 71 cities nationwide. This study aims to assess the impact of DIP on medical expenditure, efficiency, and quality for inpatients covered by the Urban Employee Basic Medical Insurance (UEBMI) and Urban and Rural Residents Basic Medical Insurance (URRBMI). It seeks to explore whether there are differences in these effects among inpatients of the two insurance types, thereby further understanding its implications for health equity. Materials and methods We conducted interrupted time series analyses on outcome variables reflecting medical expenditure, efficiency, and quality for both UEBMI and URRBMI inpatients, based on a dataset comprising 621,125 inpatient reimbursement records spanning from June 2019 to June 2023 in City A. This dataset included 110,656 records for UEBMI inpatients and 510,469 records for URRBMI inpatients. Results After the reform, the average expenditure per hospital admission for UEBMI inpatients did not significantly differ but continued to follow an upward pattern. In contrast, for URRBMI inpatients, the trend shifted from increasing before the reform to decreasing after the reform, with a decline of 0.5%. The average length of stay for UEBMI showed no significant changes after the reform, whereas there was a noticeable downward trend in the average length of stay for URRBMI. The out-of-pocket expenditure (OOP) per hospital admission, 7-day all-cause readmission rate and 30-day all-cause readmission rate for both UEBMI and URRBMI inpatients showed a downward trend after the reform. Conclusion The DIP reform implemented different upper limits on budgets based on the type of medical insurance, leading to varying post-treatment prices for UEBMI and URRBMI inpatients within the same DIP group. After the DIP reform, the average expenditure per hospital admission and the average length of stay remained unchanged for UEBMI inpatients, whereas URRBMI inpatients experienced a decrease. This trend has sparked concerns about hospitals potentially favoring UEBMI inpatients. Encouragingly, both UEBMI and URRBMI inpatients have seen positive outcomes in terms of alleviating patient financial burdens and enhancing the quality of care.