How does diagnosis-related group payment impact the health care received by rural residents? Lessons learned from China.

ABSTRACT

OBJECTIVES: There is growing evidence that differences exist between rural and urban residents in terms of health, access to care and the quality of health care received, especially in low- and middle-income countries (LMICs). To improve health equity and the performance of health systems, a diagnosis-related group (DRG) payment system has been introduced in many LMICs to reduce financial risk and improve the quality of health care. The aim of this study was to examine the impact of DRG payments on the health care received by rural residents in China, and to help policymakers identify and design implementation strategies for DRG payment systems for rural residents in LMICs. STUDY DESIGN: Health impact assessment. METHODS: This study compared the impact of DRG payments on the healthcare received by rural residents in China between the pre- and post-reform periods by applying a difference-in-difference (DID) methodology. The study population included individuals with three common conditions; namely, cerebral infarction, transient ischaemic attack (TIA), and vertebrobasilar insufficiency (VBI). Data on patient medical insurance type were assessed, and those who did not have rural insurance were excluded. RESULTS: This study included 13,088 patients. In total, 33.63% were from Guangdong (n = 4401), 38.21% were from Shandong (n = 5002), and 28.16% were from Guangxi (n = 3685). The DID results showed that the implementation of DRGs was positively associated with hospitalization expense (ß4 = 0.265, P = 0.000), treatment expense (ß4 = 0.343, P = 0.002), drug expense (ß4 = 0.607, P = 0.000), the spending of medical insurance funds (ß4 = 0.711, P = 0.000) and out-of-pocket costs (ß4 = 0.164, P = 0.000). CONCLUSIONS: The findings of this study suggest that the implementation of DRG payments increases health care costs and the financial burden on health systems and rural patients in LMICs. This is contrary to the original intention of implementing the DRG payment system.