Seeking to better control costs of hospital stays, China is taking steps to adopt a payment classification system batching cases that are clinically similar and are expected to use the same levels of hospital resources into groups for the purposes of determining reimbursement by its government-run health insurance system.
In piloting the use of direct reimbursement groups (DRGs) in medical institutions in 30 cities, China is assimilating a practice which has been standard in the United States since the 1980s. Rather than pay a hospital for each specific service it provides, DRGs allow insurers to pay a predetermined amount based on homogenous units of hospital activity to which binding prices can be attached.
The Chinese pilot in Beijing, Tianjin, Shanghai, Qingdao, and other cities will employ international classifications of diseases, diagnoses, procedures, age, gender, discharge status, and the presence of complications and comorbidities to determine the reimbursement groupings. The trial classification system includes over 600 groups, about half surgical procedures, and half internal medicine.
The DRGs do not apply to outpatient care, rehabilitation procedures, or mental health care. They are designed primarily to apply to acute care and short-term inpatient stays.