From Gaming to Governance: Restructuring Public Hospital Management under DRG Payment Reform

Abstract

The Diagnosis-Related Groups (DRG) payment reform serves as a pivotal institutional mechanism, compelling public hospitals to transition from volume-driven expansion to a model centered on quality and efficiency. Drawing upon principal-agent theory, this study dissects the "double-edged sword" effects inherent in DRG implementation. While the system effectively curbs irrational cost escalation through hard budget constraints, it simultaneously induces strategic gaming behaviors, specifically upcoding and risk selection, which raise concerns regarding compromised medical quality. To address these challenges, this paper proposes the construction of a modernized hospital governance framework. Specific strategies include: (1) implementing isomorphic mapping and dynamic calibration mechanisms between clinical pathways and DRG groups; (2) elevating medical record management to the level of data asset governance to establish a closed-loop quality control system; and (3) instituting a quality safety "circuit breaker" mechanism and collaborative early-warning platform that function independently of economic performance metrics. Ultimately, this study aims to drive public hospitals from passive interest-based gaming toward proactive internal governance, achieving a sustainable equilibrium between cost containment and value-based healthcare.