Healthcare Economist January 2, 2025
China has been transitioning from a fee-for-service (FFS) payment system to a Diagnosis-Related Group (DRG) payment system for hospitals in various cities. Under the FFS model, hospitals were reimbursed for each individual healthcare service provided, which created incentives to increase the number of services during a patient’s hospitalization.
In June 2019, the National Healthcare Security Administration of China announced the launch of a DRG payment pilot program, known as the CHS-DRG (China Healthcare Security Diagnosis-related Groups), in 30 cities. These pilot cities, including Beijing, Tianjin, and Shanghai, were scheduled to implement the new payment method in 2021 after a simulated run in 2020. Similar to hospitals in the US, the DRG system categorizes patients into groups based on their diagnosis,...
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