China Expands Insurance Payment Reforms to Bolster Primary Healthcare

Chinese health authorities are expanding healthcare payment reforms using a "same disease, same payment" model to direct medical resources and patients toward grassroots clinics. Under version 3.0 of the case-based payment scheme, national regulators have designated 31 DRG and 127 DIP primary-care conditions that receive uniform insurance settlement rates regardless of hospital tier. Officials from the National Healthcare Security Administration and the National Health Commission reported that 22 provincial-level regions have introduced preliminary measures, aiming to raise grassroots diagnosis rates and ease pressure on major hospitals ahead of the 15th Five-Year Plan.

Payment mechanisms are China's primary lever for establishing a functional tiered healthcare system. By equalizing medical insurance payouts across hospital levels for routine illnesses, authorities intend to incentivize community centers to treat common conditions while removing financial incentives for tertiary hospitals to monopolize basic outpatient care.

China is accelerating reforms to its basic medical insurance payment mechanisms to redirect routine medical treatments toward community clinics and township health centers, according to state media reports on a joint policy briefing. Speaking at a policy interpretation event on August 17, Xu Na, deputy director of the Medical Services Management Department at the National Healthcare Security Administration (NHSA), emphasized that payment reforms anchored in case-based settlement are critical to optimizing tiered diagnosis and treatment. Central to this effort is the "same disease, same payment" policy, under which medical insurance funds reimburse designated primary-care conditions at uniform payment standards within an administrative pool, regardless of the hospital's tier. Under version 3.0 of China's case-based payment grouping scheme, regulators have specified 31 primary-care conditions under Diagnosis-Related Groups (DRG) and 127 conditions under the Big Data Diagnosis-Intervention Packet (DIP). These conditions cover common and chronic ailments such as hypertension, diabetes, respiratory infections, and appendicitis. By standardizing payouts, the framework aims to encourage tertiary hospitals to focus on complex cases while motivating grassroots institutions to manage everyday diseases. To date, 22 provincial-level jurisdictions have introduced preliminary measures to channel insurance funds, favorable reimbursement terms, and payment mechanisms to primary facilities, according to Xinhua. Local models are already taking shape: Harbin has selected 34 standardized clinical pathways suited for primary institutions alongside family doctor contracts, while Shenzhen has introduced health-performance-based payments for chronic diseases within urban medical groups. However, health officials stress that primary clinics must improve clinical competence rather than simply expand inpatient capacity. Hu Tongyu, an official at the National Health Commission's (NHC) Primary Health Department, stated that grassroots clinics must avoid blindly pursuing hospitalizations and surgeries, focusing instead on primary care quality through county medical consortia and rehabilitation initiatives. Ren Jing, a researcher at the NHC's China National Health Development Research Center, noted that public perception and clinical capacity at the primary level remain hurdles that require multi-departmental coordination.