Impact of Diagnosis-Intervention Packet (DIP) Payment Reform on County Hospitals: Evidence from Z City, China

Background: In 2020, China introduced an innovative case-based payment method called "Diagnosis-Intervention Packet (DIP)." However, the implementation of DIP may present significant challenges to county hospitals. Therefore, this study aims to assess the impact of DIP on inpatient Volume and inpatient medical revenue at county hospitals, as well as its effect on patient flow. Methods: We collected detailed data on inpatient expenses and reimbursements from the Z City Medical Insurance Bureau for the years 2020-2022, encompassing a total of 5,339,996 records. A single-group interrupted time series analysis was conducted to examine changes in inpatient volumes and their regional distribution across municipal hospitals, county hospitals, and primary healthcare institutions before and after the DIP reform. Additionally, the impact of the reform on medical revenue at county hospitals and its regional share was analyzed. Heterogeneity by insurance type was also explored. Results: Following the implementation of the DIP reform, county hospitals experienced significant declines in both inpatient volume and inpatient medical revenue growth. Monthly inpatient visits decreased by 610.4 (p=0.063), with their market share dropping 0.28% (p=0.003). The impact was particularly pronounced for patients with Urban-Rural Residents Basic Medical Insurance (URRBMI), where monthly volume fell by 1,228.13 (p=0.012) and share decreased by 0.39% (p