Introduction

Despite its development in 1967 as patient classification system based on diagnoses and treatments, within the last three decades diagnosis-related groups (DRGs) have quickly evolved into a payment system that many countries‘ healthcare systems agree on globally.

Methods

We conducted a targeted search on published literature and Government websites to identify why countries in East Asia chose to develop DRG-based payment systems and whether it yielded positive results.

Results

South Korea formally introduced the DRG system in 2002 looking to improve ressource efficency and reducing costs. On the other hand, both Japan (2003) and Taiwan (piloting since 2010) started the use of DRGs to mainly improve resource allocation and planning to meet patient demands rather than controlling rising costs. China’s 2009 healthcare reform improved resource efficiency, however introduced healthcare coverage to a larger population. This change and the geographical nature of China therefore requires exceptional resource allocation, which China hopes to address with a DRG system.

The effects of developing and introducing DRG-based payment systems in East Asia are mixed. Japanaverage length of stay and improved quality of care by increasing planned readmission. However, despite successful cost reductions in South Korea, even 5 6.9% of inpatient expenditures and today still only covers a fraction of procedures. China’s one-decade-long DRG pilot phase to identify a suitable system showed first positive results reducing hospitalization costs, length of stay, and pharmaceutical prices in various hospitals.

Outlook

The question is if China’s positive pilot data can be translated into a comprehensively applied DRG system, as planned in 2021, or eventually follow the Taiwanese example.