A study on the impact of DRG payment reform on hospitalization costs and outcomes of patients with fractures and intervertebral disc herniations.

BACKGROUND: To curb the growth of medical expenses, the Chinese government has implemented the medical insurance payment reform based on Diagnosis-Related Groups (DRG). This study evaluates the impact of the DRG policy on hospitalization costs, length of stay, and 30-day readmission rates for patients with fractures and intervertebral disc herniation. METHODS: Hospitalization settlement records for patients with fractures and intervertebral disc herniation from a tertiary hospital in a city in eastern China between 2016 and 2025 were selected. An Interrupted Time Series (ITS) analysis was employed, with January 2020 designated as the intervention point. RESULTS: Following the implementation of the DRG policy, the total hospitalization costs accelerated from a monthly decrease of 0.12% to a monthly decrease of 1.03% (p < 0.001). Specifically, costs for the medical insurance group accelerated from a monthly decrease of 0.32 to 0.96% (p < 0.01), while the self-pay group shifted from no significant pre-reform trend to a monthly decrease of 1.18% (p < 0.001). Western medicine expenses reversed from a pre-reform monthly increase of 0.49% to a monthly decrease of 1.31% (p < 0.001). In contrast, Traditional Chinese Medicine (TCM) diagnosis and treatment fees shifted from a monthly decrease of 2.72% to a monthly increase of 1.92% (p < 0.01). The rate of decline in length of stay slowed from a monthly reduction of 4.23 to 2.80%, but no statistically significant change was observed (p > 0.05). For the medical insurance group, the decrease slowed significantly from 4.83 to 1.61% per month (p < 0.01), whereas for the self-pay group, the decrease accelerated from 2.51 to 4.94% per month (p > 0.05). No statistically significant change was observed in the 30-day readmission rate before and after the reform (p > 0.05). CONCLUSION: DRG effectively controlled hospitalization and boosted TCM use without hurting quality. But length of stay kept falling with slower decline, especially in insured patients, showing heterogeneous effects. Policymakers should target payment types to improve equity and effectiveness. Sensitivity and placebo analyses further supported these findings.