Guoxin Health Unveils 'DRG/DIP+' Integrated Intelligence Platform to Drive High-Quality Development in Healthcare
On November 30, 2021, the Ministry of Industry and Information Technology (MIIT) released the “14th Five-Year Plan for the Development of the Big Data Industry,” which not only set a growth target of “breaking through 3 trillion yuan in estimated scale for the big data industry by the end of 2025,” but also proposed the establishment of a data factor value system and a modernized big data industrial system. One of the essential pathways to achieving these goals is to cultivate a mature big data trading market.
One year later, the “Opinions of the Central Committee of the Communist Party of China and the State Council on Building a Basic Data System to Better Leverage the Role of Data as a Factor of Production” (hereinafter referred to as the “Twenty Data Measures”) once again delved into data trading. As the “definition” of data begins to shift, how to effectively collect and apply data has become a critical question that healthcare institutions must seriously address.
As one of the primary sources of healthcare big data, hospitals occupy a central position in this reform. On the one hand, the successive issuance of policy documents—including the Outline for Building a Quality Power, the Work Plan for Pilot Programs on Building Close-Knit Urban Medical Groups, and the Operational Manual for Performance Assessment of National Tertiary Public Hospitals (2023 Edition)—has consistently emphasized the need to accelerate the development of foundational healthcare data capabilities and facilitate in-depth healthcare data applications. On the other hand, as data evolves into a strategic asset, mere data governance is no longer sufficient to meet the objectives of hospital digitalization. Establishing mechanisms for healthcare data circulation and ensuring its efficient utilization will become an increasingly common requirement for hospitals.
So, is there a tool that can integrate data governance and data application across clinical and operational domains hospital-wide, balance efficiency and effectiveness in the high-quality development of hospitals, and provide hospital administrators with a “God’s-eye view”?
Recently, at the event held by China Reform Health“Seminar on Innovation in Hospital Economic Operations and Refined Management Under Healthcare Insurance Payment Reform”The interpretation of “DRG/DIP + Integrated Operations” may offer a possible answer to this question.
The so-called “DRG/DIP+” expands the application scenarios and processes of DRG/DIP to address the limitations of a single system and optimize healthcare management workflows. This expansion encompasses two dimensions. According to China Reform Health Management and Services Group Co., Ltd., the first dimension involves adding APG (Ambulatory Patient Groups) to DRG/DIP, thereby establishing a “closed-loop total budget management” system that integrates outpatient and inpatient services, thus promoting high-quality development at the hospital operational level. The second dimension integrates the data governance capabilities of the DRG system into resource consumption management, refined operational management, and clinical pathway management, creating an integrated operational management model based on DRG/DIP+ to facilitate the refined integration of hospital quality and efficiency.
Due to the unique and complex nature of medical services, controlling and regulating healthcare costs presents significant challenges. Relying solely on Diagnosis-Related Groups (DRG) or Big Data Diagnosis-Intervention Packet (DIP) to control inpatient care costs may lead to a shift of expenses from inpatient to outpatient settings, thereby increasing the financial pressure on outpatient medical insurance funds. Furthermore, this approach fails to provide evidence-based support for hospital-wide management decision-making.
Therefore, the incorporation of APG in the first dimension establishes a closed-loop management system for outpatient and inpatient medical insurance payments. This shifts healthcare reimbursement from volume-based to value-based payment, standardizes clinical workflows, enables hospital-wide management, and drives high-quality development across the entire institution.
Over the past two years, Jinhua City in Zhejiang Province has taken the lead in demonstrating the operational value of China Reform Health’s “DRG/DIP + Integrated” model (extending from inpatient DRG/DIP to outpatient APGs) through empirical data. Following the implementation of these reforms, the growth rate of medical insurance fund expenditures for outpatient medical costs in Jinhua City dropped from approximately 25% pre-reform to within the 10% target set by the provincial government in 2020. This achievement established a closed-loop management system for global budgeting in conjunction with the inpatient “diagnosis-related group point-value” payment method, further improving the long-term balance mechanism of the medical insurance fund and enhancing its utilization efficiency.
Pilot Programs First, North-South Coordination. After Dongying City implemented actual payments under the Big Data Diagnosis-Intervention Packet (DIP) system in August 2021 and was designated as a DIP training base by the National Healthcare Security Administration, it further collaborated with China Reform Health to proactively plan the reform of outpatient payment methods across medical institutions citywide, laying the foundation for the implementation of Ambulatory Patient Group (APG) payments in 2023. Since the implementation of actual DIP payments in Dongying City, the year-on-year growth rate of total inpatient medical expenses in the first three quarters of 2021 decreased by nearly 5% compared to 2020. With the addition of APG payments, Dongying City is poised to achieve a reduction in total medical expenses, covering both inpatient and outpatient services.
Overall, the emergence of the closed-loop “DRG/DIP + APG” solution has achieved two major outcomes. First, it has stimulated healthcare institutions’ intrinsic motivation to proactively control outpatient costs and treatment expenses, thereby avoiding the “whack-a-mole problem” associated with standalone inpatient systems and enabling effective, controllable budget management for medical insurance expenditures across the entire hospital. Second, it has standardized outpatient diagnostic and procedural data for all healthcare institutions within a region. By standardizing clinical practices and implementing end-to-end management, this approach improves outpatient care outcomes, reduces inpatient resource utilization, and shifts the focus of health interventions upstream. It also provides positive incentives for physicians’ “health performance,” thereby driving high-quality hospital development from the fundamental perspective of medical value.
Furthermore, by supporting local healthcare security administrative departments in implementing global budget controls for inpatient and outpatient expenses within regions or medical consortia, the “DRG/DIP + APG” model can guide patients to seek medical care rationally, shift the responsibility for chronic disease management to primary care institutions, and achieve orderly division of labor and coordination between tertiary hospitals and primary healthcare providers. This approach will gradually enhance contracted service management and chronic disease management capabilities at the primary level, thereby providing a practical and feasible pathway for the implementation of the tiered diagnosis and treatment system during the 14th Five-Year Plan period and the realization of the strategic goals of “Healthy China.”
During the development of DRG/DIP, many hospitals have limited the scope of DRG/DIP capabilities to the first dimension in order to meet policy requirements. However, health insurance data spans across different medical business units, and its application scenarios connect the entire hospital management chain. It can not only serve as a tool for controlling healthcare costs but also has the potential to activate hospital-wide data intelligence, becoming a key driver for hospitals to steer towards refined and high-quality transformation.
Therefore, in the second dimension, “DRG/DIP+” needs to be deeply integrated with resource consumption management, refined operational management, and clinical pathway management. This integration helps hospitals transition from standardized whole-process management to integrated refined operations, and ultimately optimize clinical pathways based on resource consumption patterns, thereby achieving a synergistic improvement in both quality and efficiency of clinical diagnosis and treatment.
FirstIt involves empowering hospitals with digital intelligence for standardized management throughout the entire process. By integrating medical record quality control, point-of-care supervision, and health insurance settlement list quality control into an intelligent hospital management system based on DRG/DIP/APG, the system initiates prescription review, supervision, and quality control at the moment physicians complete medical records. Leveraging predictive analytics, it displays various grouping scenarios based on real-time diagnoses and predicted surgical procedures. This enables hospitals to implement proactive interventions and process warnings regarding DRG/DIP/APG pre-grouping, payment standards, and settlement discrepancies. Following dynamic monitoring and targeted identification of potential regulatory risks, the system ensures moderate and standardized control. It provides a one-stop workflow for settlement, quality control, data upload, archiving, feedback, and appeals, thereby guaranteeing timely, accurate, and comprehensive data submission and enhancing the hospital’s integrated management capabilities.
Secondly“DRG/DIP+” Refined Resource Consumption Management Drives Lean Operations. Addressing the pain points and practical needs of hospitals in medical insurance services and operational management, China Reform Health’s “DRG/DIP+ In-Hospital Performance Allocation” leverages comprehensive medical record quality control rules to provide an integrated solution for medical insurance payment and health administrative assessments. By conducting in-depth analysis across various business scenarios, it focuses on identifying issues and implementing precise measures, effectively helping hospitals translate performance assessment indicators into business operational management. Building on this foundation, its “DRG/DIP+ Hospital-Wide Cost Accounting and Budget Management” deepens cost analysis from hospital-level, departmental, and item-based costs to disease group and disease-specific costs, promoting standardized clinical diagnosis and treatment, identifying the hospital’s advantageous disease categories, and facilitating the development of specialized disciplines.
Meanwhile, China Reform Health leverages cost accounting data to formulate cost budgets, shifting budget control checkpoints upstream to the operational front end. While meeting the development requirements of clinical services and research/teaching activities, as well as the needs for integrated allocation of human, financial, and material resources, it issues early warnings on drug and consumable usage at the physician level and monitors equipment resource allocation at the operational level. These measures are incorporated into performance evaluations to stimulate the initiative of medical staff, facilitating the hospital’s gradual transition from “revenue growth” to “cost reduction,” and from a financial perspective to a value chain perspective, thereby comprehensively and precisely achieving lean hospital operations based on cost accounting.
FinallyOptimizing Clinical Pathways to Achieve Integration of Quality and EfficiencyDRG/DIP/APG systems establish resource consumption pathways within hospitals. Optimizing clinical pathways based on these resource consumption pathways essentially involves decomposing DRG/DIP/APG indicators to develop a comprehensive management tool for the entire diagnosis and treatment process. This approach focuses on three key dimensions: service capability, service efficiency, and quality safety, thereby reshaping a new model of “quality-efficiency” management. Driven by DRG/DIP/APG policies, hospitals will prioritize key initiatives such as promoting rational drug use, improving the appropriate utilization of diagnostic tests and laboratory examinations, strengthening average length of stay (ALOS) management, and enhancing management of cost-overrun disease groups. These efforts aim to establish an integrated, refined operational control pathway based on the Plan-Do-Study-Act (PDSA) cycle. By anchoring this pathway in clinical operations, promoting rational diagnosis and treatment tailored to individual conditions, optimizing resource allocation, improving service quality, and incentivizing collaborative practices, hospitals can create a feedback loop that supports clinical practice. Ultimately, this achieves the integration of “quality and efficiency,” simultaneously elevating both medical quality and health economic performance.
China Reform Health’s industry layout, which is anchored in health insurance payment standards, deeply integrates into the entire process of medical operations and management, and expands integrated “DRG/DIP+” operational services, will help healthcare institutions gradually establish standardized data collection and unified usage norms. This facilitates the development of a comprehensive lean operational management system that uses disease types and clinical pathways as units, health insurance payment as the benchmark, full-cost accounting as the outcome, and value-based healthcare as the orientation. Currently, multiple hospitals have achieved significant improvements in their rankings in the National Performance Evaluation for Tertiary Public Hospitals.
In its collaboration with Nanjing Drum Tower Hospital, the Affiliated Hospital of Nanjing University Medical School, China Reform Health has integrated the aforementioned innovative applications into its comprehensive solutions. After nearly a year of governance, key indicators such as the hospital’s Case Mix Index (CMI), medical record quality, and the proportion of medical service revenue have all increased, while metrics including average hospitalization cost per visit, average length of stay, the proportion of pharmaceutical and consumable costs, the proportion of examination and testing costs, the time consumption index, and the cost consumption index have all decreased comprehensively. Following this strategic pivot, Nanjing Drum Tower Hospital has transformed its “DRG/DIP+” integrated operations from an operational obstacle into a vital tool for facilitating high-quality development.
Notably, in the new era of vigorous national promotion of high-quality development in public hospitals, large-scale or leading public hospitals across various regions are exhibiting trends toward group-based operations and multi-campus expansion. The pilot initiatives for National Medical Centers and Regional Medical Centers have directly driven new demands for informatization construction underpinning this multi-campus development. When designing its “DRG/DIP+” whole-process management system, China Reform Health incorporated multi-campus hospitals and medical groups into the framework, leveraging cross-campus monitoring and comprehensive management evaluation services to facilitate high-quality development across the entire healthcare system.
Compared to standalone hospitals, the information systems of medical groups are more complex. Different campuses may adopt different foundational systems such as HIS and PACS, or be distributed across multiple medical insurance pooling regions. Therefore, to establish “DRG/DIP+” operational services across multiple campuses, it is first essential to have robust multimodal data processing capabilities; secondly, it is necessary to conceptualize from an “integrated” perspective of “one unified entity,” designing an architecture that combines systematicity with flexibility for group-wide deployment.
Despite the challenges encountered during the exploration process, China Reform Health ultimately achieved a significant upgrade and leap forward. Taking the collaboration between China Reform Health and Aier Eye Hospital Group as an example, Aier Eye Hospital operates 376 hospitals based on cloud-based Hospital Information Systems (HIS), distributed across more than 300 medical insurance pooling areas. In consideration of the group-wide deployment requirements, technical teams from both parties implemented a series of modifications to the system login methods based on actual conditions. Furthermore, to accommodate the flexibility in configuration across various hospitals within the group and to adapt to the varying adjustments in local medical insurance policies, the system was further upgraded. It now supports automatic data identification pathways for different regions and institutions, invoking distinct grouping engines, validation engines, audit engines, and payment engines. This enables decentralized management by authority and domain, ensuring effective data isolation. Additionally, the system access mode was adjusted to domain-name-based access, achieving compatibility with Aier Eye Hospital’s UAT, public cloud, and private cloud environments, thereby safeguarding the overall flexibility, adaptability, security, and stability of the system.
In November 2022, both parties completed the pilot implementation at Wuhan Aier Eye Hospital. On the basis of ensuring medical quality, effective guidance was provided to the hospital for DRG/DIP case-mix management through measures such as point-of-care reminders, real-time precise case-group prediction, accurate payment forecasting during treatment, real-time dynamic monitoring, and post-treatment case-group analysis. This optimized health insurance fund settlements and enhanced the refined operational management level of Aier Eye Hospital Group.
As the first group-level cloud deployment case in the industry, this collaboration has elevated China Reform Health’s hospital-side products from the “intra-hospital governance dimension” to a higher level of “integrated monitoring and comprehensive management evaluation.”
To meet the multi-departmental and multi-center management needs of a top-tier hospital, China Reform Health leveraged its “DRG Information Analysis and Monitoring Management System” to establish a “hyper-converged cluster system” deployed at the main hospital campus. This system collects, stores, and integrates data from DRG-related business systems across multiple campuses in accordance with unified standards, enabling comprehensive cross-campus DRG business analysis. Meanwhile, tailored DRG business analysis platforms, medical record quality control systems, intelligent health insurance audit systems, and business support systems were respectively deployed at each branch campus to address their specific requirements.
Under this “hyper-converged + sub-center” system architecture, the hospital may be able to streamline its existing cross-departmental business processes. By leveraging big data–driven homogeneous, integrated, and efficient management, it can build an intelligent healthcare ecosystem and a collaborative multi-campus medical service system, thereby achieving inter-regional monitoring and control of medical quality.
It can be seen that,“DRG/DIP+” Integrated Operations is not merely a form of product and service, but also a comprehensive management tool, a “quality-efficiency integration” management model, and a beneficial exploration in the construction of a regional healthcare homogenization system.
Innovative payment has been a hot niche in the healthcare sector for several years. Commercial insurers, with health insurance products at their core, have long been deeply engaged in the medical field. However, their exploration efforts were once hampered by challenges such as limited business penetration and difficulties in achieving transparent data accounting. With the widespread adoption of DRG-related tools in hospitals, the fog surrounding medical data may gradually be lifted.
Supported by China Reform Health’s exploration of “DRG/DIP + Rational Drug Use,” hospitals will be able to establish clear budgets for the cost of individual diseases, spanning from medical insurance settlement to clinical operations. Meanwhile, health and medical insurance authorities can publicly release data on the incidence rates and pharmaceutical expenditures for different regions, age groups, and diseases. This provides commercial insurers with an actuarial basis to unbundle coverage responsibilities and isolate uncertainties, thereby enabling more precise pricing and product design under varying coverage scenarios.
Under the current system, China Reform Health has successfully integrated medical services with operational management through its “DRG/DIP+” model. The company is further expanding to cover the entire upstream and downstream ecosystem of the healthcare industry. In collaboration with government entities, it is focusing on building a data-centric service system for commercial insurance, including intelligent claims auditing, expedited direct reimbursement, chronic disease management, and smart elderly care. Its mission is to ensure comprehensive, all-encompassing health coverage for the entire population, spanning from childhood to old age, from illness to recovery, and from medical treatment to long-term care.
The burden is heavy and the road is long; we must be broad-minded and resolute. As a central state-owned enterprise-controlled listed company in the field of health security services, China Reform Health has the responsibility to continue leveraging data intelligence as a key driver, basing its operations on the integrated “DRG/DIP+” model. By covering all members, all aspects, and the entire process, it aims to focus on forming a service community centered on patients and health, extending high-quality development across the entire medical and healthcare system, facilitating the coordinated development of medical care, health insurance, and pharmaceuticals, and jointly building an innovative ecosystem platform for China’s health security.