Provider payment reform is widely regarded as an important policy instrument for improving medical service efficiency, while empirical evidence on mixed provider payment systems remains limited. Taking China’s Sanming healthcare reform as a case, this study examines the effects of a mixed provider payment system that combines global budgets with diagnosis-related group (DRG)-based payment, referred to as the “double-bundling” reform, on medical service performance. Using a balanced panel dataset of public medical institutions in Sanming from 2014 to 2023, we exploit the staggered rollout of the reform as a quasi-natural experiment and estimate its effects using a staggered difference-in-differences approach. The results show that the reform significantly reduced the inpatient-to-outpatient admission ratio while increasing average length of stay and bed occupancy rate. These findings suggest that the reform was associated with higher admission thresholds, fewer potentially avoidable hospitalizations, and improved bed utilization within county-level medical institutions. Additional results indicate that the reform contributed to outpatient cost containment without a statistically significant increase in the average cost per inpatient admission. Overall, the evidence suggests that the provider payment reform helped strengthen cost-control incentives and improve the alignment between expenditure restraint and service delivery efficiency within vertically integrated county-level medical alliances. This study provides empirical evidence from China for the design of mixed provider payment reforms in integrated delivery systems.
LIU et al. (2026) studied this question.