The escalating costs of healthcare had prompted countries to undertake reforms, and in recent years China had focused on overhauling its outpatient healthcare system. China implemented the outpatient mutual-aid policy which had led to a change in the costs associated with outpatient treatment from being fully self-paid by the patient to being partially self-paid. This study aimed to assess the impact of the outpatient mutual-aid policy on inpatient services for oncology patients in Wuhan, China, exploring the impact that the cumbersome administration of health insurance would have on patient welfare. 24,260 oncology patients of the health insurance reimbursement database in Wuhan spanning from January 2022 to July 2023 were included. After data processing, 12,985 patients were included in the control group and 11,275 patients were included in the experimental group. The regression discontinuity design was employed to assess the impact of the policy. The findings was that the implementation of the outpatient mutual-aid would result in a reduction of 1.2days in the length of stay for oncology patients, a decrease in hospital costs by 5%, and a decline in expenditure of the health insurance reimbursement funds by 5 per cent. Incorporating outpatient costs into reimbursement supplanted the utilization of inpatient services, enhanced the allocation of healthcare resources, and alleviated the financial burden on oncology patients. Furthermore, it highlighted the detrimental impact of eligibility review to verify that a patient meets the reimbursement requirements of the health insurance policy on patient welfare.