China Healthcare: 3 Strategies to Tackle Expanding Payment Reform

Published on May 24, 2023

China has launched DRG/DIP payment methods to better control medical costs, creating new challenges and opportunities. Experts Lillian Li, Siyan Chen, and Fan Chen outline what manufacturers can do to ensure future and better growth.

With rapid economic growth, accelerated urbanization and an aging population, healthcare expenditure continues to rise steadily in China. At the same time, the traditional Fee-for-Service payment method is not sufficient in controlling medical costs. Considering the strong need for cost containment in public medical insurance funds, the Chinese government has been piloting various payment methods to motivate medical institutions to control medical costs since 2009.

In 2019 and 2020, China’s National Healthcare Security Administration (NHSA) officially launched its Diagnosis-Related Group (DRG) payment reform in 30 pilot cities and its Diagnosis-Intervention Packet (DIP) payment reform in 71…