The effects of insurance coverage under Shanghai hospital global budget management

BACKGROUND: Against the backdrop of rapidly rising healthcare expenditures and ongoing reforms in medical insurance payment systems, rigorous evaluation of payment policies and their impacts on medical behavior and outcomes is of critical importance. METHODS: Using 32,313 inpatient records from the cardiology and cardiothoracic surgery departments of a tertiary hospital in Shanghai between 2007 and 2015, this study constructs a quasi-experimental difference-in-differences (DiD) framework to assess the effects of the Shanghai global budget prepayment policy on hospital cost structures and healthcare quality. RESULTS: The results indicate that the DiD estimator of the policy significantly reduced total inpatient expenditures, suggesting a more streamlined and rationalized cost structure. However, the implementation of the policy was also associated with a significant increase in in-hospital mortality, raising concerns about potential unintended consequences for patient outcomes. The 30-day readmission rate did not change significantly following the reform. To strengthen causal inference, propensity score matching was employed to balance patient characteristics across pre-and post-policy periods. The findings remain robust across multiple sensitivity analyses. CONCLUSION: Overall, this study highlights the complex trade-offs between cost containment and care quality under payment reform and provides quantitative evidence to inform the optimization of global budget prepayment policies and the advancement of value-based healthcare.