Impact of Diagnosis-Related Groups (DRG) Payment on the Quality and Efficiency of Peripheral Arterial Disease (PAD) Care: A Mixed-Methods Study

OBJECTIVES: This study aimed to investigate the impact of the diagnosis-related groups (DRG) payment on the quality and efficiency of care for peripheral arterial disease (PAD) patients in China.

METHODS: Using a mixed-methods design, we analyzed quantitative data from a PAD cohort registry from 10 tertiary hospitals in China between 2021 and 2023, and qualitative data from interviews in DRG pilot hospitals. A difference-in-differences (DID) analysis evaluated the effect of DRG payment, assessing quality of care through six indicators (three immediate post-surgery and three within a 30-day period) and the efficiency using hospitalization expenditure and length of stay. Post-surgery indicators included changes in clinical severity, probability of clinical severity reduction, and patient-reported symptom relief. For the 30-day metrics, we assessed changes in health-related quality of life, probability of its improvement, and the incidence of adverse events. In qualitative analysis, we performed thematic analysis according to the top-down policy implementation hierarchy.

RESULTS: DID results indicated DRG lowered hospitalization expenses by 6% (P<0.05) and shortened lengths of stay by 1.3 days (P<0.05) without significantly altering the six quality indicators. Qualitative findings further confirmed these impacts, which stemmed from both the DRG policy and internal hospital management. Fixed-payment naturally incentivized efficiency improvements, while regular revisions of DRG systems, additional payments for cost-outliers, and targeted monitoring were applied to address unintended consequences on quality. Within hospitals, administrative departments responded with enhanced financial management, training, and evaluation of DRG-related performance, effectively encouraging a focus on both efficiency and quality. Clinical departments, guided by these management measures, reconciled both aspects by minimizing costly consumables while adopting more tailored patient management.

CONCLUSIONS: DRG significantly improved care efficiency without compromising short-term care quality for PAD. Further research should explore the long-term impacts on quality and identify effective strategies for incentivizing and monitoring provider behaviors.