How hospital autonomy affects provider payment reform effectiveness.

BACKGROUND: Provider payment reforms (PPRs) have demonstrated mixed results for improving health system efficiency. Since PPRs require health care organisations to interpret and implement policies, the organizational characteristics of hospitals may affect the effectiveness of PPRs. Hospitals with more autonomy have the flexibility to respond to PPRs more efficiently, but they may not if the autonomy previously facilitated behaviours that counter the PPR's objective. This study examines whether hospitals with higher autonomy responds to PPRs more effectively. METHODS: We used data from a matched-pair, cluster randomized controlled PPR intervention in a resource-limited Chinese province between 2014 and 2018. The intervention reformed the reimbursement method from the publicly administered New Cooperative Medical Scheme (NCMS) from fee-for-service to global budget. We interacted measures of hospital autonomy over surplus, hiring, and procurement (drugs, consumables, equipment, and overall index) with the difference-in-difference estimator to examine how autonomy moderated the intervention's effect. RESULTS: Autonomy over surplus (p < 0.01) and procurement of equipment (p < 0.01) were associated with relatively faster NCMS expenditure growth, demonstrating worse PPR response. They were also associated with higher expenditure shifting to out-of-pocket expenditures (p > 0.05). Post hoc analysis suggests that hospitals with surplus autonomy had higher OOP per admission (p < 0.01), suggesting profiteering tendencies. Other dimensions of autonomy demonstrated imprecise association. DISCUSSION: Hospitals with more autonomy may not necessarily respond more effectively to PPRs that incentivise efficiency when they had previously been encouraged to maximise profit. Policymakers should assess the extent of perverse incentives before granting autonomy and adjust the incentives accordingly.

Preferences of healthcare workers for provider payment systems in The Gambia's National Health Insurance Scheme.

BACKGROUND: The Government of The Gambia introduced a national health insurance scheme (NHIS) in 2021 to promote universal health coverage (UHC). Provider payment systems (PPS) are strategic purchasing arrangements that can enhance provider performance, accountability, and efficiency in the NHIS. This study assessed healthcare workers' (HCWs') preferences for PPS across major service areas in the NHIS. METHODS: A facility-based cross-sectional study was conducted using a probability proportionate to size sampling technique to select an appropriate sample size. Health care workers were presented with options for PPS to choose from across major service areas. Descriptive statistics explored HCW socio-demographic and health service characteristics. Multinomial logistic regressions were used to assess the association between these characteristics and choices of PPS. RESULTS: The majority of HCW did not have insurance coverage, but more than 60% of them were willing to join and pay for the NHIS. Gender, professional cadre, facility level, and region influenced HCW's preference for PPS across the major service areas. The preferred PPS varied among HCW depending on the service area, with capitation being the least preferred PPS across all service areas. CONCLUSION: The National Health Insurance Authority (NHIA) needs to consider HCW's preference for PPS and factors that influence their preferences when choosing various payment systems. Strategic purchasing decisions should consider the incentives these payment systems may create to align incentives to guide provider behaviour towards UHC. The findings of this study can inform policy and decision-makers on the right mix of PPS to spur provider performance and value for money in The Gambia's NHIS.

Gender variation in Medicare utilization and payments in gynecologic oncology.

OBJECTIVES: The Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File (POSPUF) and Medicare Physician and Other Supplier National Provider Identifier (POS NPI) Aggregate Report are publicly available files from the Center for Medicare and Medicaid Services that include payments to providers who care for fee-for-service Medicare recipients. The aim of this study was to analyze variability in gynecologic oncologists' Medicare reimbursements, with attention to differences in provider gender and time in practice. METHODS: The 2015 POSPUF and POS NPI were analyzed with respect to gynecologic oncologists. We searched external publicly available data sources to confirm subspecialty and to determine each provider's number of years in practice. Evaluation and management (E&M) and procedure/surgery codes were analyzed; drug delivery codes were excluded due to variability in billing by facility/hospital. RESULTS: The POS NPI file included 733 gynecologic oncologist providers receiving $55,626,739 in total payments. Female providers comprised 39% of gynecologic oncologists and received 31% of reimbursements (30% of E&M reimbursements and 24% of surgical reimbursements). During the first ten years in practice, female providers comprised 58% of providers and accounted for 52% of reimbursed services, compared to 38% of providers/26% of reimbursed services (11-20 years), and 18% of providers/19% of reimbursed services (>20 years). CONCLUSION: Male gynecologic oncologists perform more Medicare services than their female counterparts. There is a comparable number of services performed between genders among both the most senior and the most junior providers, with a gender gap in services and reimbursements among mid-career providers.

The 2010 expansion of activity-based hospital payment in Israel: an evaluation of effects at the ward level.

BACKGROUND: In 2010, Israel intensified its adoption of Procedure-Related Group (PRG) based hospital payments, a local version of DRG (Diagnosis-related group). PRGs were created for certain procedures by clinical fields such as urology, orthopedics, and ophthalmology. Non-procedural hospitalizations and other specific procedures continued to be paid for as per-diems (PD). Whether this payment reform affected inpatient activities, measured by the number of discharges and average length of stay (ALoS), is unclear. METHODS: We analyzed inpatient data provided by the Ministry of Health from all 29 public hospitals in Israel. Our observations were hospital wards for the years 2008-2015, as proxies to clinical fields. We investigated the impact of this reform at the ward level using difference-in-differences analyses among procedural wards. Those for which PRG codes were created were treatment wards, other procedural wards served as controls. We further refined the analysis of effects on each ward separately. RESULTS: Discharges increased more in the wards that were part of the control group than in the treatment wards as a group. However, a refined analysis of each treated ward separately reveals that discharges increased in some, but decreased in other wards. ALoS decreased more in treatment wards. Difference-in-differences results could not suggest causality between the PRG payment reform and changes in inpatient activity. CONCLUSIONS: Factors that may have hampered the effects of the reform are inadequate pricing of procedures, conflicting incentives created by other co-existing hospital-payment components, such as caps and retrospective subsidies, and the lack of resources to increase productivity. Payment reforms for health providers such as hospitals need to take into consideration the entire provider market, available resources, other - potentially conflicting - payment components, and the various parties involved and their interests.

A checklist for designing health insurance programmes - a proposed guidelines for Nigerian states.

BACKGROUND: There is widespread and growing interest in designing and implementing social health insurance schemes (SHIS) across many low- and middle-income countries as a means to improve financial protection and achieve universal health coverage. SHIS recently gained traction in Nigeria, but evidence regarding optimal design features of SHIS is sparse and there is lack of a simple and standardised checklist that scheme designers, implementers and researchers could use to assess, guide and inform the design of SHIS. This paper seeks to develop a checklist based on concepts as well as theoretical and empirical evidence that can inform and guide scheme designers and implementers on design options to maximise the effectiveness of the scheme. METHODS: We conducted a review of literature exploring the relevant concepts for the development of a framework and checklist to identify the key factors or variables required to inform the design of SHIS. The checklist details critical considerations/questions to address and options for design. The developed checklist was then used to examine conditions for readiness and appropriateness of SHIS design in two states in Nigeria (Kaduna and Niger). RESULTS: This paper describes the development of a SHIS checklist. The findings also demonstrate that the newly developed checklist, consisting of six design domains, can be used by scheme designers and policy-makers as a simple and effective tool to assess and inform SHIS design features across Nigeria to maximise the chances of the effectiveness of the schemes. CONCLUSION: In conclusion, given that the development of SHIS in the Nigerian states is still in its early stages, applying the SHIS design checklist can serve as a first step to ensuring a feasible and sustainable insurance scheme. The introduction of SHIS, if properly designed and implemented, can be a significant first step towards improving the accessibility, equity and efficiency of healthcare in Nigeria.

Health care purchasing in Kenya: Experiences of health care providers with capitation and fee-for-service provider payment mechanisms.

BACKGROUND: Provider payment mechanisms (PPMs) play a critical role in universal health coverage due to the incentives they create for health care providers to deliver needed services, quality, and efficiency. We set out to explore public, private, and faith-based providers' experiences with capitation and fee-for-service in Kenya and identified attributes of PPMs that providers considered important. METHODS: We conducted a qualitative study in two counties in Kenya. Data were collected using semistructured interviews with 29 management team members in six health providers accredited by the National Hospital Insurance Fund (NHIF). RESULTS: Capitation and fee-for-service payments from the NHIF and private insurers were reported as good revenue sources as they contributed to providers' overall income. The expected fee-for-service payment amounts from NHIF and private insurers were predictable while capitation funds from NHIF were not because providers did not have information on the number of enrolees in their capitation pool. Moreover, capitation payment rates were perceived as inadequate. Capitation and fee-for-service payments from NHIF and private insurers were disbursed late. Finally, public providers had lost their autonomy to access and utilise capitation and fee-for-service payments from the NHIF. CONCLUSION: Through their experiences, health care providers revealed characteristics of PPMs that they considered important.

An unintended consequence of provider payment reform: The case of capitation grants in the National Health Insurance reform of Indonesia.

One of the most important components of the ambitious 2014 National Health Insurance reform in Indonesia is the implementation of prospective payment system known as capitation grants, paid monthly to the primary health providers based on the enrolment rate. This has ushered in additional financial resources for the health managers in resource allocations, especially in the hiring of manpower. Drawing data from the Indonesia Family Life Survey (1993-2015), this paper uses difference-in-differences method to evaluate the effects of the payment method reform on the allocation of human resources for health among the primary health providers. To our surprise, there was no statistically significant change in the total number of full-time staff among the capitated facilities after the reform. However, capitation grants caused an increase in the number of full-time equivalent and part-time equivalent contract staff, but a significant decline in the number of full-time permanent staff among the urban capitated facilities. It is likely that more contract health workers were hired at the expense of full-time permanent staff among the capitated facilities in the urban regions. This unintended consequence shed light on the need to develop nuanced and contextual understanding of payment reforms in developing countries.

Lebanon's essential health care benefit package: A gateway for universal health coverage.

Recent years have demonstrated the resurgence of a global commitment toward universal health coverage (UHC). The first step toward developing a sustainable primary health care (PHC)-oriented UHC program is the creation and service delivery of an explicit essential health care benefit package (EHCP). This paper aims to describe the development, features, and progress of the EHCP in Lebanon, in addition to outlining barriers, facilitators, and next steps. Building on the investments made in the PHC network, the ministry of public health in Lebanon piloted an essential PHC package program in 2016 targeting vulnerable Lebanese and was able to enroll over 87% of targeted population to date. In order to scale up the EHCP to the national level and achieve UHC, modifications need to be made to the package entitlements, provider payment mechanisms, and implementation arrangements. The paper also notes that further advocacy and lobbying are needed in order to place UHC and the EHCP on the national agenda and stimulate public demand.

Measuring the Activity of Mental Health Services in England: Variation in Categorising Activity for Payment Purposes.

In the context of international interest in reforming mental health payment systems, national policy in England has sought to move towards an episodic funding approach. Patients are categorised into care clusters, and providers will be paid for episodes of care for patients within each cluster. For the payment system to work, clusters need to be appropriately homogenous in terms of financial resource use. We examine variation in costs and activity within clusters and across health care providers. We find that the large variation between providers with respect to costs within clusters mean that a cluster-based episodic payment system would have substantially different financial impacts across providers.

Effects of mixed provider payment systems and aligned cost sharing practices on expenditure growth management, efficiency, and equity: a structured review of the literature.

BACKGROUND: Strategic purchasing of health care services has become a key policy measure on the path to achieving universal health coverage. National provider payment systems for health services are typically characterized by mixes of provider payment methods with each method associated with distinct incentives for provider behaviours. Reaching incentive alignment across methods is critical to enhancing the effectiveness of strategic purchasing. METHODS: A structured literature review was conducted to synthesize the evidence on how purposively aligned mixed provider payment systems affect health expenditure growth management, efficiency, and equity in access to services with a particular focus on coordinated and/or integrated care management. RESULTS: The majority of the 37 reviewed articles focused on high-income countries with 74% from the US. Four categories of payment mixes were examined in this review: blended payment, bundled payment, cost-containment reward models, and aligned cost sharing mechanisms. Blended payment models generally reported moderate to no substantive reductions in expenditure growth, but increases in health system efficiency. Bundled payment schemes consistently report increases in efficiency and corresponding cost savings. Cost-containment rewards generated cost savings that can contribute to effective management of health expenditure growth. Evidence on aligned cost-sharing is scarce. CONCLUSION: There is lacking evidence on when and how mixed provider payment systems and cost sharing practices align towards achieving goals. A guiding framework for how to study and evaluate mixed provider payment systems across contexts is warranted. Future research should consider a conceptual framework explicitly acknowledging the complex nature of mixed provider payment systems.

Effectiveness evaluation of quota payment for specific diseases under global budget: a typical provider payment system reform in rural China.

BACKGROUND: Quota payment for specific diseases under global budget is one of the most typical modes of provider payment system reform in rural China. This study aimed to assess this reform mode from aspects of the total fee, structure of the fee and enrollees' benefits. METHODS: A total of 127,491 inpatient records from 2014 to 2016 were extracted from the New Rural Cooperative Medical Scheme (NRCMS) database in Weiyuan County, Gansu Province. Total fee, actual compensation ratio, out-of-pocket ratio, constituent ratio of the treatment fee, constituent ratio of the inspection and laboratory fee, and length of stay were selected as dependent variables. Both generalized additive models (GAMs) and multiple linear regression models were used to measure the change in dependent variables along with year. RESULTS: Prior to the adjustment of the compensation type, out-of-pocket ratio and length of stay decreased, while total fee, actual compensation ratio, constituent ratio of the treatment fee, and constituent ratio of the inspection and laboratory fee increased. After the compensation type was adjusted, the mean of the total fee increased rapidly in 2015 and remained stable in 2016. The mean length of stay increased in 2015 but decreased in 2016. A comparison of inpatients suffering from diseases covered by quota payments and those suffering from general diseases revealed that total fee, out-of-pocket ratio, and length of stay decreased and actual compensation ratio increased for the former, whereas the opposite was true for the latter. Constituent ratio of the treatment fee and constituent ratio of the inspection and laboratory fee increased for both samples, except for the constituent ratio of the inspection and laboratory fee of quota payment diseases in 2016, which did not change. CONCLUSIONS: Quota payment for specific diseases under global budget had obviously positive effects on cost control in Weiyuan, Gansu. Considering the limited coverage of quota payment for diseases, the long-term effect of this reform mode and its replicability awaits further evaluation.

What characteristics of provider payment mechanisms influence health care providers' behaviour? A literature review.

BACKGROUND: Provider payment mechanisms (PPMs) create incentives or signals that influence the behaviour of health care providers. Understanding the characteristics of PPMs that influence health care providers' behaviour is essential for aligning PPM reforms for improving access, quality, and efficiency of health care services. We reviewed empirical literature that examined the characteristics of PPMs that influence the behaviour of health care providers. METHODS: We systematically searched for empirical literature in PubMed, Web of Science, and Google Scholar databases and complemented these with physical searching of the references of selected papers for further relevant studies. A total of 16 studies that met our inclusion and exclusion criteria were identified. We analysed data using thematic review. RESULTS: We identified seven major characteristics of PPMs that influence health care providers' behaviour. Of these characteristics, payment rate, the sufficiency of payment rate to cover the cost of services, timeliness of payment, payment schedule, performance requirements, and accountability mechanisms were the most important. CONCLUSIONS: Our review found that health care providers' behaviour is influenced by the characteristics of PPMs. Provider payment mechanism reforms that optimally structure these characteristics can elicit required incentives for access, equity, quality, and efficiency in service delivery among health care providers towards achieving universal health coverage.

Getting Incentives Right? The Impact of Hospital Capitation Payment in Vietnam.

This paper evaluates the impact on cost and utilization of a shift from fee-for-service to capitation payment of district hospitals by Vietnam's social health insurance agency. Hospital fixed effects analysis suggests that capitation leads to reduced costs. Hospitals also increased service provision to the uninsured who continue to pay out-of-pocket on a fee-for-service basis. The study points to the need to anticipate unintended effects of payment reforms, especially in the context of a multiple purchaser system. Copyright © The World Bank Health Economics © 2015 John Wiley & Sons, Ltd.

Impacts of a new insurance benefit with capitated provider payment on healthcare utilization, expenditure and quality of medication prescribing in China.

OBJECTIVES: To assess a new Chinese insurance benefit with capitated provider payment for common diseases in outpatients. METHODS: Longitudinal health insurance claims data, health administrative data and primary care facility data were used to assess trajectories in outpatient visits, inpatient admissions, expenditure per common disease outpatient (CD/OP) visit and prescribing indicators over time. We conducted segmented regression analyses of interrupted time series data to measure changes in level and trend overtime, and cross-sectional comparisons against external standards. RESULTS: The number of total outpatient visits at 46 primary care facilities (on the CD/OP benefit as of July 2012) increased by 46 895 visits/month (P = 0.004, 95% CI: 15 795-77 994); the average number of CD/OP visits reached 1.84/year/enrollee in 2012; monthly inpatient admissions dropped from 6.4 (2009) to 4.3 (2012) per 1000 enrollees; the median total expenditure per CD/OP visit dropped by CNY 15.40 (P = 0.16, 95% CI: -36.95~6.15); injectable use dropped by 7.38% (P = 0.03, 95% CI: -14.08%~-0.68%); antibiotic use was not improved. CONCLUSIONS: Zhuhai's new CD/OP benefit with capitated provider payment has expanded access to primary care, which may have led to a reduction in expensive specialist inpatient services for CD/OP benefit enrollees. Cost awareness was likely raised, and rapidly growing expenditures were contained. Although having been partially improved, inappropriate prescribing of antibiotics and injectables was still prevalent. More explicit incentives and specific quality of care targets must be incorporated into the capitated provider payment to promote scientifically sound and cost-effective care and treatment.

Effect of a case-capped, fee-for-service payment mechanism on accessibility and affordability of health care.

In response to a government audit report in 2021, the Philippine health insurance system transitioned its case-based payment system back into a fee-for-service model capped at individual case rates. This commentary discusses the adverse effects of this policy on health care accessibility and affordability in the country. A rapid review of data shows that it may have resulted in delayed insurance payments, increased denial rates, and reduced coverage, and weakened the strategic purchasing capacity of public health insurance, hugely affecting vulnerable populations and public health care facilities. The commentary calls for a reconsideration of the policy and emphasizes the importance of aligning financial auditing procedures with the needs of health-financing institutions. It advocates for a transformation of audits, moving beyond their traditional role as compliance checks, to become valuable tools supporting a nation's health care purchasing strategies, ultimately benefiting both health care providers and the broader public.

How provider payment methods affect health expenditure of depressive patients? Empirical study from national claims data in China from 2013 to 2017.

BACKGROUND: This study aimed to investigate the associations between provider payment methods and expenditure of depressive patients, stratified by service types and hospital levels. METHODS: We used a 5 % random sample of urban claims data in China (2013-2017), collected by China Health Insurance Research Association. Provider payment methods (fee-for-services, global budget, capitation, case-based and per-diem payments) were the explanatory variables. A generalized linear model was fitted for the associations between provider payment methods and expenditure. All analyses were adjusted for patient"cioeconomic and health-related characteristics. RESULTS: In total, 64,615 depressive patient visits were included, 59,459 for outpatients and 5156 for inpatients. Female patients accounted for 63.00 %. The total and out-of-pocket (OOP) expenditure significantly differentiated by provider payments. Among outpatient services, when comparing with fee-for-services, capitation payment was associated with substantial marginal reduction in total and OOP expenditure (-$34.18, -$9.71) in primary institutes, yet increases ($27.26, $24.11) in secondary hospitals. Similarly, global budget was associated with lower total and OOP expenditure (-$13.51, -$1.61) in secondary hospitals, while higher total and OOP expenditure ($7.43, $32.27) in tertiary hospitals than fee-for-services. For inpatients, total and OOP expenditures under per-diem (-$857.65, -$283.48) and case-based payments (-$997.93, -$137.56) were remarkably smaller than those under fee-for-services in primary and secondary hospitals, respectively. Besides, case-base payment was only linked with the largest reduction in OOP expense (-$239.39) in inpatient services of tertiary hospitals. LIMITATION: Only urban claims data was included in this study, and investigations for rural population still warrant. And updated data are needed for future studies. CONCLUSIONS: There were varying correlations between provider payment methods and expenditure, which differed by service types and hospital levels. These findings provided empirical evidence for optimizing the mixed payment methods for depression in China.

An Assessment of Provider Payment Mechanisms (PPMs) in Ethiopia: Implications for Redesign of PPMs and Progress Toward Universal Health Coverage.

Ethiopia has made great strides in improving population health but sustaining health system and population health improvements in the current fiscal environment is challenging. Provider payment, as a function of purchasing, is a tool to use limited health resources better. This study describes the design and implementation of Ethiopia's provider payment mechanisms (PPMs) and how they influence health system objectives and contribute to universal health coverage goals. The research team adapted the framework and analytical tools of the Joint Learning Network for Universal Health Coverage guide for assessing PPMs. Data were collected through literature review and key informant interviews with 11 purchasers and 17 health care providers. Content analysis was used to describe PPM design and implementation arrangements, and thematic analysis was used to distill effects on equity in resource distribution and access to care, efficiency, quality of care, and financial sustainability. The study revealed the PPMs had positive and negative consequences. Line-item budgets were perceived to be predictable and sustainable but had little effect on efficiency and provider performance. Fee-for-service was perceived to have negative effects on efficiency and financial sustainability but viewed positively on its ability to incentivize quality health services. Capitation and performance-based financing effects were viewed positively on equity in distribution of resources and quality respectively, but both were perceived negatively on their high administrative burden to providers. Ethiopia may consider a more nuanced approach to design blended provider payment to mitigate negative consequences while providing incentives for better quality of care and efficiency.

Impact of Medical-Pharmaceutical Separation Reform on Hospitalization Expenditure in Tertiary Public Hospitals: Difference-in-Difference Analysis Based on Panel Data from Beijing.

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.

Financial incentives for integrated care: A scoping review and lessons for evidence-based design.

BACKGROUND: In response to the increasing prevalence of people with chronic conditions, healthcare systems restructure to integrate care across providers. However, many systems fail to achieve the desired outcomes. One likely explanation is lack of financial incentives for integrating care. OBJECTIVES: We aim to identify financial incentives used to promote integrated care across different types of providers for patients with common chronic conditions and assess the evidence on (cost-)effectiveness and the facilitators/barriers to their implementation. METHODS: This scoping review identifies studies published before December 2021, and includes 33 studies from the United States and the Netherlands. RESULTS: We identify four types of financial incentives: shared savings, bundled payments, pay for performance, and pay for coordination. Substantial heterogeneity in the (cost-)effectiveness of these incentives exists. Key implementation barriers are a lack of infrastructure (e.g., electronic medical records, communication channels, and clinical guidelines). To facilitate integration, financial incentives should be easy to communicate and implement, and require additional financial support, IT support, training, and guidelines. CONCLUSIONS: All four types of financial incentives may promote integrated care but not in all contexts. Shared savings appears to be the most promising incentive type for promoting (cost-)effective care integration with the largest number of favourable studies allowing causal interpretations. The limited evidence pool makes it hard to draw firm conclusions that are transferable across contexts.

Scaling-up through piloting: dual-track provider payment reforms in China's health system.

Gaining wide prominence in the global health arena, scaling-up increases the coverage of health innovations emerging from pilots and experimental projects to a larger scale. However, scaling-up in the health sector should not follow a linear 'pilot-diffusion' pathway in order to better facilitate local adaptation and policy refinement. This paper puts forth 'scaling-up through piloting' as a distinctive pathway for the strategic management of scaling-up in the health sector. It analyses the recent development of provider payment reforms in China, focusing particularly on the ongoing pilot programmes, namely diagnosis-related groups (DRGs) and diagnosis-intervention packet (DIP), that are being piloted in a dual-track fashion since 2020. Data were drawn from extensive documentary analysis and 20 in-depth interviews with key stakeholders, including decision-makers and implementers. This paper finds that scaling-up through piloting helps Chinese policymakers minimize the vast uncertainties associated with complex payment reforms and maximize the local adaptability of provider payment innovations. This pathway has forged a phased implementation process, allowing new payment models to be tested, evaluated, compared and adjusted in a full spectrum of local contexts before national rollout. The phased implementation creates a 'slower is faster' effect, helping reduce long-term negative consequences arising from improperly managed scaling-up in a complex system. Error detection and correction and recalibration of new policy tools can support national-level policy refinement in a more robust and dynamic fashion. Several key factors have been identified as crucial for strategic scaling-up: necessary central steering, a pragmatic piloting design, strong technical capacity and effective policy learning mechanisms.