DRG Payment System

How it works

Benefits

Risks & contraindications

Comparisons

Background

Highlighted claims

• The DRG payment system originated in the USA and has since been implemented in approximately 40 countries, including Australia, Canada, Germany, France, and Japan. — Enhanced recovery after surgery in elective benign general gynaecological surgery: postoperative recovery outcomes and health economic value of hospitalisation costs under China’s diagnosis-related group (DRG) payment system – a retrospective cohort study at a tertiary hospital
• China began nationwide DRG implementation in 2021, driven by rising costs from an ageing population, uneven medical resource distribution, and the need to curtail over-treatment under fee-for-service models. — Enhanced recovery after surgery in elective benign general gynaecological surgery: postoperative recovery outcomes and health economic value of hospitalisation costs under China’s diagnosis-related group (DRG) payment system – a retrospective cohort study at a tertiary hospital
• Under Beijing's DRG model, hospitals retain a financial surplus when actual costs fall below the DRG payment ceiling, and absorb an over-expense when costs exceed it. — Enhanced recovery after surgery in elective benign general gynaecological surgery: postoperative recovery outcomes and health economic value of hospitalisation costs under China’s diagnosis-related group (DRG) payment system – a retrospective cohort study at a tertiary hospital
• At PUMCH, all average hospitalisation costs remained substantially below DRG ceilings across both disease types and all insurance groups, so hospitals consistently generated a financial surplus. — Enhanced recovery after surgery in elective benign general gynaecological surgery: postoperative recovery outcomes and health economic value of hospitalisation costs under China’s diagnosis-related group (DRG) payment system – a retrospective cohort study at a tertiary hospital
• Known challenges of DRG systems include uneven resource allocation, potential reduction of necessary services, diagnostic upcoding, misalignment with new technologies, financial strain on small hospitals, and premature discharge. — Enhanced recovery after surgery in elective benign general gynaecological surgery: postoperative recovery outcomes and health economic value of hospitalisation costs under China’s diagnosis-related group (DRG) payment system – a retrospective cohort study at a tertiary hospital
• International experience with DRG systems shows mixed results: Japan's variant reduced costs but did not improve quality, while South Korea's mandatory DRG shortened stays. — Enhanced recovery after surgery in elective benign general gynaecological surgery: postoperative recovery outcomes and health economic value of hospitalisation costs under China’s diagnosis-related group (DRG) payment system – a retrospective cohort study at a tertiary hospital