OBJECTIVES: Beijing introduced a reform, separating drug sales from medical services, to end markups on drug prices and adjust prices of 435 medical services on April 8, 2017. We evaluated whether the reform had impact on Traditional Chinese Medicine (TCM) Hospitals.

METHODS: Using hospital-based, monthly data of all TCM hospitals in Beijing from Jan 2014 to Apr 2018, we employed panel interrupted time-series model with hospital fixed effects to estimate the impact of reform. Two segments were divided by intervention points. Outcomes were the number of monthly outpatient and inpatient visits, gross revenue, revenue from medical care service, revenue from medicines sales, the share of revenue from drug sales, and average total cost per outpatient and inpatient.

RESULTS: All outcomes exhibited rising trends before any policy was carried except the share of revenue from drug sales. The launch of separating drug sales from medical services reform led to significant instant reductions in levels of the number of monthly outpatient visits, revenue from medicines sales, and share of revenue from drug sales by 13%, 14%, and 15%, as well as increased the levels of average total cost per outpatient by 6.3%. Moreover, the previous upward trends were changed into downward trends for number of monthly outpatient, and to steady trends for number of monthly inpatient, gross revenue, revenue from medical care service, and revenue from medicines sales. The share of revenue from drug sales and average total cost per inpatient continued to drop or growth with higher pace, respectively.

CONCLUSIONS: Although separating drug sales from medical services reform could control or reduced the upward trends of medical care utilization and total health expenditure, the average total cost per outpatient and inpatient still growth steady.