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      Unraveling the effects of DIP payment reform on inpatient healthcare: insights into impacts and challenges

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          Abstract

          Background

          The Diagnosis-Intervention Packet (DIP) payment system, initiated by China's National Healthcare Security Administration, is designed to enhance healthcare efficiency and manage rising healthcare costs. This study aims to evaluate the impact of the DIP payment reform on inpatient care in a specialized obstetrics and gynecology hospital, with a focus on its implications for various patient groups.

          Methods

          To assess the DIP policy's effects, we employed the Difference-in-Differences (DID) approach. This method was used to analyze changes in total hospital costs and Length of Stay (LOS) across different patient groups, particularly within select DIP categories. The study involved a comprehensive examination of the DIP policy's influence pre- and post-implementation.

          Results

          Our findings indicate that the implementation of the DIP policy led to a significant increase in both total costs and LOS for the insured group relative to the self-paying group. The study further identified variations within DIP groups both before and after the reform. In-depth analysis of specific disease groups revealed that the insured group experienced notably higher total costs and LOS compared to the self-paying group.

          Conclusions

          The DIP reform has led to several challenges, including upcoding and diagnostic ambiguity, because of the pursuit of higher reimbursements. These findings underscore the necessity for continuous improvement of the DIP payment system to effectively tackle these challenges and optimize healthcare delivery and cost management.

          Supplementary Information

          The online version contains supplementary material available at 10.1186/s12913-024-11363-8.

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          Most cited references18

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          Medicare upcoding and hospital ownership.

          E Silverman, Jonathan S. Skinner (2004)
          Many hospitals in the 1990s many hospitals were accused of "upcoding" patient diagnostic related groups (DRGs) to increase Medicare reimbursements. We find that between 1989 and 1996, the percentage point share of the most generous DRG for pneumonia and respiratory infections rose by 10 points among not-for-profit hospitals, 23 points among for-profit hospitals, and 37 points in hospitals converting to for-profit status. Not-for-profit upcoding was also higher in markets with a larger for-profit hospital share. Upcoding appears to reflect both risk-taking by administrators and a closer alignment between the goals of the administration and the behavior of the clinical staff.
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            Activity-Based Funding of Hospitals and Its Impact on Mortality, Readmission, Discharge Destination, Severity of Illness, and Volume of Care: A Systematic Review and Meta-Analysis

            Karen Palmer, Thomas Agoritsas, Danielle Martin … (2014)
            Background Activity-based funding (ABF) of hospitals is a policy intervention intended to re-shape incentives across health systems through the use of diagnosis-related groups. Many countries are adopting or actively promoting ABF. We assessed the effect of ABF on key measures potentially affecting patients and health care systems: mortality (acute and post-acute care); readmission rates; discharge rate to post-acute care following hospitalization; severity of illness; volume of care. Methods We undertook a systematic review and meta-analysis of the worldwide evidence produced since 1980. We included all studies reporting original quantitative data comparing the impact of ABF versus alternative funding systems in acute care settings, regardless of language. We searched 9 electronic databases (OVID MEDLINE, EMBASE, OVID Healthstar, CINAHL, Cochrane CENTRAL, Health Technology Assessment, NHS Economic Evaluation Database, Cochrane Database of Systematic Reviews, and Business Source), hand-searched reference lists, and consulted with experts. Paired reviewers independently screened for eligibility, abstracted data, and assessed study credibility according to a pre-defined scoring system, resolving conflicts by discussion or adjudication. Results Of 16,565 unique citations, 50 US studies and 15 studies from 9 other countries proved eligible (i.e. Australia, Austria, England, Germany, Israel, Italy, Scotland, Sweden, Switzerland). We found consistent and robust differences between ABF and no-ABF in discharge to post-acute care, showing a 24% increase with ABF (pooled relative risk  = 1.24, 95% CI 1.18–1.31). Results also suggested a possible increase in readmission with ABF, and an apparent increase in severity of illness, perhaps reflecting differences in diagnostic coding. Although we found no consistent, systematic differences in mortality rates and volume of care, results varied widely across studies, some suggesting appreciable benefits from ABF, and others suggesting deleterious consequences. Conclusions Transitioning to ABF is associated with important policy- and clinically-relevant changes. Evidence suggests substantial increases in admissions to post-acute care following hospitalization, with implications for system capacity and equitable access to care. High variability in results of other outcomes leaves the impact in particular settings uncertain, and may not allow a jurisdiction to predict if ABF would be harmless. Decision-makers considering ABF should plan for likely increases in post-acute care admissions, and be aware of the large uncertainty around impacts on other critical outcomes.
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              The effects of diagnosis-related groups payment on hospital healthcare in China: a systematic review

              Kun Zou, Hong-Ying Li, Die Zhou … (2020)
              Background There has been a growing interest in using diagnosis-related groups (DRGs) payment to reimburse inpatient care worldwide. But its effects on healthcare and health outcomes are controversial, and the evidence from low- and middle- income countries (LMICs) is especially scarce. The objective of this study is to evaluate the effects of DRGs payment on healthcare and health outcomes in China. Method A systematic review was conducted. We searched literature databases of PubMed, Cochrane Library, EMBASE, Web of Science, Chinese National Knowledge Infrastructure and SinoMed for empirical studies examining the effects of DRGs payment on healthcare in mainland China. We performed a narrative synthesis of outcomes regarding expenditure, efficiency, quality and equity of healthcare, and assessed the quality of evidence. Results Twenty-three publications representing thirteen DRGs payment studies were included, including six controlled before after studies, two interrupted time series studies and five uncontrolled before-after studies. All studies compared DRGs payment to fee-for-service, with or without an overall budget, in settings of tertiary (7), secondary (7) and primary care (1). The involved participants varied from specific groups to all inpatients. DRGs payment mildly reduced the length of stay. Impairment of equity of healthcare was consistently reported, especially for patients exempted from DRGs payment, including: patient selection, cost-shifting and inferior quality of healthcare. However, findings on total expenditure, out of pocket payment (OOP) and quality of healthcare were inconsistent. The quality of the evidence was generally low or very low due to the study design and potential risk of bias of included studies. Conclusion DRGs payment may mildly improve the efficiency but impair the equity and quality of healthcare, especially for patients exempted from this payment scheme, and may cause up-coding of medical records. However, DRGs payment may or may not contain the total expenditure or OOP, depending on the components design of the payment. Policymakers should very carefully consider each component of DRGs payment design against policy goals. Well-designed randomised trials or comparative studies are warranted to consolidate the evidence of the effects of DRGs payment on healthcare and health outcomes in LMICs to inform policymaking.
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                Author and article information

                Contributors
                Guang-ming Tan: guangmingtannhh@163.com
                Journal
                Journal ID (nlm-ta): BMC Health Serv Res
                Journal ID (iso-abbrev): BMC Health Serv Res
                Title: BMC Health Services Research
                Publisher: BioMed Central (London )
                ISSN (Electronic): 1472-6963
                Publication date (Electronic): 3 August 2024
                Publication date PMC-release: 3 August 2024
                Publication date Collection: 2024
                Volume: 24
                Electronic Location Identifier: 887
                Affiliations
                [1 ]GRID grid.459579.3, ISNI 0000 0004 0625 057X, Department of Medical Record, , Guangdong Women and Children Hospital, ; Guangzhou, China
                [2 ]GRID grid.410737.6, ISNI 0000 0000 8653 1072, Department of Medical Information, , GuangZhou Eighth People’s Hospital, GuangZhou Medical University, ; Guangzhou, China
                Article
                Publisher ID: 11363
                DOI: 10.1186/s12913-024-11363-8
                PMC ID: 11297722
                PubMed ID: 39097710
                SO-VID: 21165b30-1f78-493f-9b53-31bb7a5bc03f
                Copyright © © The Author(s) 2024
                License:

                Open Access This article is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License, which permits any non-commercial use, sharing, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if you modified the licensed material. You do not have permission under this licence to share adapted material derived from this article or parts of it. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by-nc-nd/4.0/.

                History
                Date received : 16 January 2024
                Date accepted : 25 July 2024
                Categories
                Subject: Research
                Custom metadata
                issue-copyright-statement © BioMed Central Ltd., part of Springer Nature 2024

                ScienceOpen disciplines: Health & Social care
                Keywords: diagnosis-intervention packet (dip),difference-in-differences (did),inpatient care economics,china
                Data availability:
                ScienceOpen disciplines: Health & Social care
                Keywords: diagnosis-intervention packet (dip), difference-in-differences (did), inpatient care economics, china

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