Summary of Key Points
The National Healthcare Security Administration has released the DRG/DIP 3.0 classification scheme, with the main changes being more refined groupings and the inclusion of primary care diseases for the first time, which forces hospitals to reorganize their services. The number of core DRG groups has increased from 409 to 492, with a focus on complex diseases such as tumors and severe conditions, while the number of core DIP diseases has been reduced from 9,520 to 5,125. For the first time, 158 primary care diseases (such as hypertension and appendectomy) have been listed, and a system of "same disease, same payment" has been implemented, meaning that the medical insurance reimbursement standards for the same disease are consistent across all levels of hospitals. This makes it less profitable for large hospitals to treat minor illnesses and encourages them to focus on higher-value diseases like tumors and severe conditions. The implementation of these changes has been postponed until March 2027. However, the total healthcare budget has not increased, so the reorganization of the groups is essentially a redistribution of funds. Issues such as declining reimbursement rates, increased competition among hospitals, and the inability of primary care facilities to handle the increased workload remain. There is also a trend towards the integration of DRG and DIP systems.
Detailed Analysis
1. Adjustment of Groupings: More expensive for Tumors and Severe Conditions, cheaper for Common Diseases
The core logic of DRG 3.0 is to make complex diseases more valuable and simple diseases less so:
- Tumors and severe conditions become more profitable: Different treatment methods for tumors (chemotherapy, targeted therapy, immunotherapy, interventional ablation) are now categorized separately, and blood tumors are separated from solid tumors (for example, leukemia and lung cancer are now reimbursed differently). Severe conditions involving invasive ventilators and CRRT (renal replacement therapy) are also classified separately. These are areas where large hospitals have a competitive advantage, and treating these diseases results in higher reimbursement.
- Common diseases are pushed to primary care: 158 primary care diseases have been identified, and the reimbursement amount is the same regardless of whether the treatment is provided in a top-tier hospital or a community clinic. Large hospitals have higher costs (due to higher doctor salaries and more expensive equipment), so treating these diseases results in lower profits or even losses, making them less inclined to treat them.
- DIP is moving towards DRG: The number of core DIP diseases has been halved, focusing more on high-value conditions, blurring the lines between the two systems (for example, both are starting to be categorized based on treatment methods).
2. Same Disease, Same Payment: Will Large Hospitals Give Up Treating Minor Illnesses?
Previously, large hospitals could profit from treating both minor and serious illnesses. For the same disease (such as appendicitis), top-tier hospitals received more reimbursement than community clinics due to higher grade coefficients. With the new policy of "same disease, same price," large hospitals no longer benefit from treating minor illnesses, and the goal is to shift these cases to primary care. However, there are two key issues:
- Can primary care facilities handle these cases?: For example, whether community doctors have the necessary skills for appendectomy? If complications arise or the hospitalization period is longer, it may end up costing more than in a large hospital, where the procedures are more efficient and recovery times are faster.
- Will large hospitals really give up?: If large hospitals continue to expand their capacity, they may still try to treat minor illnesses to maintain their revenue, especially by admitting patients with mild conditions like diabetes, leaving primary care centers with fewer patients.
3. The Budget Remains Fixed: More Detailed Groupings Mean Less Money
The total healthcare budget is fixed (for example, 10 billion yuan per year for a city). As the weight of complex diseases increases, the amount allocated to them also increases, but the amount allocated to other diseases decreases, leading to declining reimbursement rates:
- Example: If one "weight" used to be worth 10,000 yuan, with the total budget unchanged, a new weight might only be worth 9,500 yuan due to the increased number of complex diseases. Hospitals that treat more complex diseases may end up overspending.
- To achieve budget surplus, hospitals may cut costs by shortening hospital stays and reducing tests and medical supplies. Some hospitals link surpluses to doctor performance (for example, a 1,000 yuan surplus results in a 100 yuan bonus), putting pressure on doctors (such as a 30% reduction in salaries). This can lead to extreme behaviors, such as over-treatment of minor cases or shirking of high-risk patients.
4. The Integration of DRG and DIP
DRG originally involved payment by disease groups, while DIP involved payment based on disease scores. Now:
- DRG groupings are becoming more detailed (from 409 to 492), and DIP is merging disease categories (from 9,520 to 5,125), indicating a convergence of the two systems.
- Policies are encouraging the integration of the two, and experts predict that a unified "disease-based payment system" will be established in the future, eliminating the distinction between DRG and DIP.
5. Will Hospital Reorganizations and Competition Continue?
With the new classification, hospitals will need to reorient their services:
- Large hospitals: Focus on high-value diseases to maximize profits.
- Primary care: Can only treat common diseases and rely on lower costs (such as cheaper labor) to make small profits.
- Mid-sized hospitals: Caught between the pressure from larger hospitals above and the competition from primary care facilities below, they face the greatest challenge.
However, if large hospitals continue to expand, they may still try to treat minor illnesses. If primary care facilities cannot improve their capabilities, minor cases may be referred out to outpatient clinics or home care. Although commercial insurance can supplement healthcare funding, it also imposes cost controls on hospitals, providing limited relief.
In Simple Terms
DRG 3.0 aims to allocate healthcare resources more efficiently, with large hospitals focusing on severe conditions and primary care centers on minor illnesses. However, since the total budget has not increased, issues such as increased competition and doctor stress will persist. The ultimate success of the new system depends on the ability of primary care facilities to handle the increased workload and whether large hospitals truly shift their focus.