P44 Moral Hazard Effects of Payment Methods Reform in China

Abstract

With the development of economy, the intensification of healthy aging and the gradual expansion of health insurance coverage, the rapidly increasing medical expenses have become one of the main challenges facing the reform of China's medical and health care system. The key to effectively controlling the excessive rise of medical expenditures and ensuring the sustainability of medical insurance funds lies in whether the reform of medical insurance payment methods can be effectively promoted. China started a pilot project to modify the DRG payment reform in 2017, and intends to implement a multifaceted and complex medical insurance payment method based on payment by diagnosis-related groups or disease type in 2024. Diagnosis-related group payment system is frequently seen as helpful in containing the development of healthcare costs. However, it also causes moral hazard issues on the supply side, including higher rates of readmission to hospitals and cost shifting. This research aims to explore the impact of diagnosis-related group payment reform on supply-side moral hazard in China.