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DRG payment, financial signals, and low-value hospitalizations in China

Bibliographic Data

ID22088990
AuthorsLixiang Wu (0000-0003-0571-454X, Wenzhou Medical University), Ni Wu (0000-0003-0751-3047, Sichuan University), Lihong Lin (Wenzhou Medical University), Qin Ying (0000-0002-7676-1784, Wenzhou Medical University), Xiaoyuan Zhou (0000-0002-0930-1278, Sichuan University), Yangyang Zhu (0009-0007-1635-9471, Wenzhou Medical University, corresponding author)
Year2026
Volume14
Pages1797063-1797063
Publication date2026-05-05
Open AccessYes
TypeARTICLE
VenueFrontiers in Public Health (JOURNAL)
Journal identifiersISSN: 2296-2565 • E-ISSN: 2296-2565
PublisherFrontiers Media SA (PUBLISHER • CH)
DOI10.3389/fpubh.2026.1797063
PMID42163925
OpenAlexW7160252480
LanguageEN
References cited25

Objective: To examine whether China's Diagnosis-Related Group (DRG) payment reform is associated with low-value inpatient admissions-defined as entire hospitalizations of questionable necessity-and to identify the primary drivers of this type of care. Methods: We developed a new rule to identify low-value admissions using claims data, synthesizing international standards and Chinese health policies. We conducted a analysis of all DRG payment records (2022-2024, N = 251,811) from a large tertiary hospital in a region that adopted the reform early. A multilevel mixed-effects logistic regression model was applied, with the DRG Medical Expense Ratio (DER)-a measure of profitability at the case level-as the key explanatory variable. Results: The overall incidence of low-value hospitalizations was 4.86% and rose by 76.5% from 2022 to 2024, resulting in insurance expenditures of 51.23 million Chinese Yuan. Admissions with the highest profit margins (low DER) were significantly more likely to be low-value (high vs. low DER: OR = 0.056). By 2024, 80.74% of low-value cases were classified as "check-up dominated" admissions. Conclusion: Within the DRG payment environment in China, the financial incentives created by the reform are associated with hospitals admitting patients for low-value, low-complexity care, effectively shifting rather than eliminating waste in the healthcare system

China · Diagnosis-related group · Health care · Health insurance · Incentive · Logistic regression · Payment · Profitability index · Healthcare cost, quality, practices · Healthcare Policy and Management · Primary Care and Health Outcomes

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