Impact of Diagnosis-Intervention Packet (DIP) reforms on inpatient services for low-income populations in central China: A multi-stage interrupted time-series analysis

Abstract

As global healthcare costs continue to rise, concerns about health equity have become increasingly prominent. In response, China introduced the Diagnosis-Intervention Packet (DIP) reform in 2021 to optimize healthcare resource allocation and control costs. While the reform has been widely discussed in terms of its overall cost-control effects, its heterogeneous impact on low-income populations, especially across different hospital tiers, remains unclear. This study aims to fill this gap by examining the differentiated impact of the DIP reform on low-income patients’ inpatient service utilization. Using multi-stage interrupted time series (ITS) analysis, we analyzed 1.17 million hospitalization records from low-income patients in City S, a pilot city in central China. The study reveals that DIP significantly reduced total hospitalization costs and length of stay (LOS) but led to increased readmission rates, indicating a trade-off between efficiency gains and potential risks to care quality. The reform’s effects varied by hospital tier: primary hospitals saw increased demand for non-acute hospitalization due to reduced out-of-pocket (OOP) payments, exposing resource shortages; secondary hospitals balanced cost control and revenue by shortening stays and increasing admission frequency, which raised readmission risks; and tertiary hospitals, treating critically ill patients, enhanced treatment completeness, though multiple hospitalizations were still needed for full recovery. The study introduces a two-dimensional framework— “hospital tier-policy cycle”—demonstrating that differences in service capacity across hospital levels are central to the heterogeneous effects of the DIP reform. These findings suggest that future policies should strengthen primary care resources, introduce quality assurance mechanisms, and consider bundled payment models for critical care. This research contributes valuable insights for optimizing equity in DIP reform and offers implications for similar healthcare payment systems globally.