The implementation of cost target management in hospitals must follow the following basic principles:
1, the principle of cost minimization
Cost minimization is also known as cost minimization, the lowest cost point. The so-called cost minimization, is based on the task of cost accounting management, through the analysis of various factors to reduce costs, the development of the lowest possible cost target, and based on effective control and management, so that the actual management results to achieve the lowest cost target. Hospital management, the pursuit of hospital cost minimization must pay attention to: ① to ensure the quality of treatment and care as a prerequisite; ② to social and technical benefits as a prerequisite for the economic benefits should first consider the social benefits; ③ to start from the practical point of view, pay attention to the cost of minimization of the relativity of the hospitals, departments and departments are not the same as the actual conditions, can not be simple to require uniformity, can not be the pursuit of the target; ④ to Based on the exploration of ways to reduce costs and potential; ⑤ to pay attention to mobilize the masses, grasp all the impact of cost minimization links, research and seek management methods, including the best operating procedures and methods, the best medical cooperation, the best diagnosis and treatment and nursing process arrangements, the best use of medical materials, the best equipment, equipment and materials, management and maintenance, the least expenditure on management costs, the least occurrence of medical errors, accidents, disputes, and so on. The best way to achieve this is to have the least medical errors, accidents, disputes, and so on.
2, the principle of comprehensive cost management
To achieve the purpose of cost minimization, it is necessary to implement comprehensive cost management, that is, the whole hospital, the whole staff, the whole process of management, to change the one-sided nature of the actual cost and diagnostic and treatment costs only, but from the hospital, departments, teams at all levels, diagnosis and treatment, technology, management, logistics and other aspects of the realization of the cost of management, through planning, decision-making, control, accounting, analysis, assessment, Control, accounting, analysis, assessment and other methods to calculate each link of physical labor and live labor consumption, so that everyone participates in the whole process of hospital diagnosis and treatment and nursing care work and business activities are cost target management.
3, the principle of cost responsibility system
Hospitals to fully realize the cost accounting management, must be graded, division of labor, divided into cost responsibility system as the basic guarantee, in particular, we must clearly delineate the boundaries of the scope of the responsibility: ① President of the hospital cost of mismanagement, the emergence of a serious waste of phenomena, and even undeservedly, a significant decline in economic efficiency is responsible for the hospital's poorly planned, the connection between various links, affecting the completion of the cost targets. poor, affecting the completion of the cost targets responsible for the occurrence of serious violations of financial discipline and cost overruns responsible; ② treatment and care management department (Medical Education and Nursing Department) to be responsible for the serious impact of treatment and care due to improper scheduling, to be responsible for the decline in the quality of medical care resulting in a marked increase in disputes responsible for the implementation of the system of technical and economic responsibility in the process of discovering the consequences of a serious waste of hospital resources and funds. Hospital resources and funds are responsible for the consequences of the implementation of the technical and economic responsibility system; ③ supplies department to the medical supplies are not timely, the quality of materials to grasp the economic losses caused by the impact of the normal conduct of diagnosis and treatment and nursing care work is responsible for not according to the plan of the procurement of inventory backlogs, or inventory poor storage caused by deterioration, damage, expiry and failure of a variety of losses; ④ finance and accounting department to the hospital funds are poorly managed, or cause a large number of material The financial and accounting department shall be responsible for the mismanagement of hospital funds, or causing a large amount of material backlog, or causing serious cost overruns due to lax control of operating expenses, or causing funds to be cheated due to violation of discipline and law, or causing long-term delinquency affecting the normal flow of funds and benefits of the hospital; ⑤ The business department shall be responsible for the blindly proposing the procurement of equipment and materials and resulting in backlogs or poor benefits, or causing accidents due to violation of rules, regulations, and operating procedures causing the hospital to incur economic losses, or exceeding the consumption of supplies, materials and funds resulting in medical cost overruns. Medical cost overruns are responsible. In short, to clarify the responsibility, each responsible for the serious consequences of the person to be dealt with in accordance with the rules.
4, the principle of effective cost accounting
The core issue of effective cost accounting is "effective", to get the maximum output of the minimum input, to the minimum manpower, the most frugal financial and material resources to achieve the goal of comprehensive costing tasks, so the principle of hospital costing management is not just the pursuit of form, not fashionable. The pursuit of form, not to seek fashionable, but should be based on the benefits and effects, so that the cost can be converted into patients to achieve the effectiveness of disease diagnosis and treatment and quality.
5, the principle of scientific cost management
The so-called scientific cost accounting, refers to the use of modern management science theories and methods of cost accounting management, in particular the use of systems analysis theory, for the characteristics of the cost management, purposeful analysis, relevance analysis, holistic analysis, aggregation analysis and environmental analysis, qualitative - quantitative analysis, decision-making analysis, and environmental adaptation analysis. -quantitative analysis, decision analysis and value engineering and other management, through the cost target management, so that the hospital diagnosis and treatment and nursing work to achieve technically appropriate, economically appropriate, the lowest cost, the highest benefit.
Hospital full cost accounting
Cost control mechanism and development status ? The current status and problems of China's current hospital cost accounting and control ? Who can be the first to implement, who will lead ? Just started
Characteristics of hospital costs Cost control mechanism and development status ? Limitations of the hospital financial accounting system ? Cost accounting system to be established ? Income and expenditure are not proportional ? Hospital costs are incomplete ? Cost accounting object division is unreasonable ? Incomparability of costing results ? Cost accounting information utilization value is not high ? . . . . . . Classification and Application of Costs ? There are many types of costs ? Different costs have different roles ? " general ledger. - The current overhead is summarized and the overhead is apportioned. - Each auxiliary operation center, line management and public **** service center expenditure ledger to collect the current auxiliary fees and **** expenses, and apportion the auxiliary fees and **** expenses. - Closing: Closing out the current balance of each operations center ledger. - Reconciliation: The sum of the revenue ledger balances of all medical operations centers is reconciled to the balance of the medical revenue ledger in the accounting, and the same is true for expenditures. - Calculate the total costs and related unit costs for each medical operation center. - Prepare a statement of income and expenses (profit and loss) and a cost statement for the operating center. - Cost and cost-performance analysis.
Improving Cost Management Functions ? Cost forecasting Make scientific estimates of future cost levels and trends based on cost-related information and data to reduce the blindness of management. Cost decision-making On the basis of cost forecasting, compare, analyze and judge the relevant programs, and select the optimal program. Cost planning Cost planning According to the cost forecast and decision-making information, the cost level in the planning period, set the cost management objectives, and establish the cost control based on the cost management responsibility system to ensure the realization of the plan. Cost control Cost control Supervision and adjustment of capital consumption in the process of medical operation, constantly adjusting the difference between the actual consumption and cost standard and responsibility cost, and promoting the continuous reduction of cost, which is the core function of cost management. Improvement of cost management functions ? Cost accounting The expenses incurred in the process of medical operation are examined and reviewed, and the costs of each object are calculated by collecting and distributing them according to certain objects and standards. It reflects the process and result of cost management and provides the basis for cost analysis and assessment. Cost analysis Cost analysis Analyze the cost level and composition changes by using cost assessment and other relevant information, systematically study the trend and reasons for cost changes, reduce costs, grasp the law of cost changes, and provide a basis for business decision-making. Cost assessment Cost assessment The hospital will cost plans and targets for decomposition, the development of internal assessment indicators, the responsible unit, clear responsibility for regular assessment.
Hospital cost accounting basis 1, the establishment of hospital cost accounting organization, equipped with and trained with the appropriate qualified high-quality cost accounting personnel; 2, the establishment of a sound hospital cost accounting and related internal control system; 3, to determine the object of hospital cost accounting, content, responsibility system, principles, cost collection process, cost sharing methods, the development of relevant cost accounting flow charts and a variety of costing with the form; 4, the development of hospital-related consumption of fixed amount, the principle of cost, the development of the relevant cost of cost accounting with a table 4, the development of hospital-related consumption quotas and internal service (cost transfer) prices; 5, the establishment of a sound hospital cost expenditure standards and control methods; 6, the preparation and approval of the hospital cost plan, the arrangements for the organization of the cost plan implementation; 7, records, measurement, collection of cost accounting information; 8, to determine the allocation of costs and expenses, apportionment of the standards and procedures; 9, according to the cost accounting object cost collection 10, according to the relevant norms and systems to calculate the cost of hospitals, organize cost accounting information, the formation of cost accounting report; 11, to carry out cost analysis, cost assessment, cost forecasting and cost decision-making Cost management principles ? Patient-centered: medical service quality first? Comprehensive cost reduction: medical education, research, logistics and administration. Participation of all staff: understanding, communication and cooperation. Divide the smallest accounting unit - treatment group ? Internal Cost Reduction Continuous Cost Reduction Contents of Departmental Cost Accounting ? Planning and Programming ? Planning and Programming... Inventory and verification of assets Pricing of internal services. Refinement of accounting items ? Breakdown and centralization of revenue items ? Improvement of personnel attendance system Management requirements for cost accounting in the department ? Cost quality: materials and services should meet the specified quality and time requirements. If the false material return system ? Quality assurance: avoid lowering quality in exchange for lower costs and transferring them to patients. Correctly delineate the boundaries between research and teaching and medical service costs. Quality assurance: to avoid lowering quality in exchange for lower costs, which are passed on to patients. Correctly delineate between fixed and variable costs, direct and indirect costs. Overall objectives of the cost accounting program Re-standardize the business process of cost accounting in accordance with the Accounting Law and the Hospital Finance and Accounting System. ? Integrate the cost accounting information system with the hospital financial clinic HIS system ? Strengthen the cost management function, realize the dynamic monitoring of departmental costs, and provide effective decision-making support for the hospital. ? Lay the foundation for carrying out project cost and disease cost accounting, and provide information for the sustainable development of the hospital. Full cost accounting implementation process ? *** Divided into five stages ? Comprehensive research ? Confirmation of business processes Data preparation System go-live ? Data Processing
Full Cost Accounting Project Implementation ? Comprehensive research: ? Departmental data ? HIS data ? Financial data ? Internal services ? Accounting period ? Depreciation method
Full Cost Accounting Project Implementation ? Business Process Recognition: ? Revenue business confirmation ? Confirmation of cost expense scope ? Confirmation of cost sharing parameters Cost accounting section level setting confirmation ? Minimum accounting unit section dictionary confirmation
Full Cost Accounting Project Implementation ? Data preparation: ? Original value of assets ? Area of the department ? Internal service item pricing method ? Large users of water, electricity and gas ? Medical billing program ? ...... Full Cost Accounting Project Implementation System go-live Voucher data testing Account Dictionary Data Testing ? Reporting data testing Full consistency between revenue, cost data and financial data ? System maintenance, upgrading, network cabling ? Operating rules and discipline
Full Cost Accounting Project Implementation ? Data processing: ? Section data into the system ? Personnel data ? Fixed assets data ? Area data ? Logistics service data ? Consumables data ...... ? All dictionary maintenance data entry
Key aspects of a successful full cost accounting system implementation ? Leadership attention ? Strategic positioning ? Personnel training ? Establishment of cost accounting system ? Implementation of performance appraisal based on cost accounting Key aspects of successful implementation of a full cost accounting system ? The director attaches importance to: ? In order to ensure the effective implementation of full-cost accounting, the hospital set up a project leading group headed by the dean, with the chief accountant in charge of coordinating the work, and set up an accounting office under the group as a day-to-day management organization to undertake project research, program preparation and implementation. The main links for the successful implementation of full cost accounting system ? Strategic positioning: ? One strategic goal: internationalized brand hospital ? Two main lines of work: academic discipline construction economic operation and management ? Three thematic markets: social insurance market, commercial insurance market, specialized disease market
Strategic management Main aspects of successful implementation of full cost accounting system? Personnel training: ? Training Dictionary Maintenance Module ? Training Revenue Data Module ? Training Cost Data Module ? Training Cost Sharing Module ? Training Cost Analysis Module ? Proficiency in using the various modules of the system and the ability to analyze the output reports Key aspects of a successful full cost accounting system implementation ? Improve the system: ? Case: Chaoyang Hospital Cost Accounting Management System (Trial) (10 chapters and 83 articles) ? Chapter I General Provisions ? Chapter 2 Full Cost Management Responsibility System ? Chapter 3 Tasks and requirements of cost accounting ? Chapter 4: Scope of Cost Expenditure Chapter V. Cost Forecasting and Cost Reduction Plan Chapter 6 Cost Accounting Chapter 7 Cost Assessment and Analysis Chapter 8 Cost Reporting and Accounting Chapter 9 Cost Monitoring and Rewards and Punishments ? Chapter 10 Bylaws
Key aspects of successful implementation of a full cost accounting system ? Performance appraisal Establishment of performance appraisal index system ? Efficiency indicators: total revenue control indicators, cost-effectiveness indicators, balance indicators; ? Service efficiency indicators: average hospitalization day indicators, bed turnover rate indicators, surgery volume, outpatient and emergency room volume indicators; ? Treatment effect indicators such as cure rate, improvement rate, aseptic surgery infection rate. ? According to the departments in the reporting period to complete the balance, combined with the weight of the indicators and the relevant principles of distribution of bonuses.
Principles of hospital costing ? Calculate for the management, the principle of combining management and calculation ? Cost accounting for hospital management services, hospital management should be combined with cost accounting.
Hospital costing principles Principle of hierarchical accounting Hospital cost accounting should generally be carried out at the hospital level, departments, departments, shifts and projects. ? Accrual principle As long as the hospital has benefited from the cost, regardless of whether it is paid, should be included in the cost of the period when the business occurs; on the contrary, the cost has been paid, the hospital has not yet benefited from the cost, even if it has been paid, can not be included in the payment of the cost of the period. ? Principle of consistency Hospitals in cost accounting, before and after the period using the same methods, techniques, standards, caliber, principles should be the same as far as possible. ? Principle of information feedback (record, control) The hospital should carry out cost control based on the information provided by cost accounting and, at the same time, should revise the relevant cost accounting methods. ? Itemized (separate business items) accounting principle ? Principle of authenticity The information on which hospital cost accounting is based and the information on the results of cost accounting should be true and reliable. Principles of hospital cost accounting ? The principle of timeliness Hospital cost accounting should be timely in order to make timely cost decisions and improve cost management. ? Historical Cost Principle The cost and expense information applied in hospital costing should be based on the actual cost and expense incurred. ? Principle of Comparability The cost information provided by hospital cost should be comparable between the previous and later periods, between the same business items in the same hospital, between the same items in different hospitals, and between departments (sections and shifts). ? Principle of Comparability When the hospital accounts for the cost of each period, each department (section, class), and each project, its cost should be based on the actual full cost incurred, and be consistent with the corresponding income of each period, each department (section, class) income, and each project income, i.e., what period of time the income is recognized, and what period of time the corresponding costs are included in the costs and expenses; which department (section, class) the income is included in, and what period of time the corresponding costs are included in the costs and expenses; which department (section, class) the income is included in, and what period the corresponding costs are included in. In which department (section, team) revenue is included, the corresponding cost is included in which department (section, team) cost; revenue is included in which project, the corresponding cost is included in which project cost.
Establishing and improving the framework and model of cost accounting
Establishing and improving the framework and model of cost accounting ? Setting prices for internal services ? When units within a hospital provide services to each other, an internal transfer price needs to be set. The internal transfer price represents revenue for the department providing the service and cost for the department being served. The purpose of setting an internal price is to prevent the transfer of responsibility between departments brought about by cost transfer, so that we can fairly and reasonably assess and evaluate the cost control and cost management of each department, thus making the data for cost accounting more accurate and the responsibilities for cost management more clear.
Establishing and improving the framework and model of cost accounting ? Methods of internal price setting ? ① Market price That is, the internal price is set according to the market price of similar products or services. Market price has two forms: the retail market price of the product or service, and the actual purchase price of the product or service when it is purchased from the market. ? ② market-based negotiated price that is, the relevant section on the quantity, quality, time and price of services, etc., after negotiation to achieve consensus and determine the price. ③ Full cost transfer price. ③ Full cost transfer price. That is, the full cost or cost plus a certain profit as the internal transfer price.
Medical Department Revenue Cost Income Statement Cost Classification Analysis Table
The rich and perfect business process and scientific and rigorous process control, to ensure that the account is consistent, to solve the problem of leakage. The barcode management can be used to realize the management of high quality products and services. Realize the whole process tracking management of barcode for high value consumables through barcode management. ? Realize the income and expenditure analysis of high-value consumables. Realize the management of secondary warehouse and flexible H Realize the management of secondary library and flexible HIS medical prescription interface function, according to the medical prescription to automatically reduce the inventory of materials in the department, to realize the "actual consumption and actual sales" management of medical prescription materials. The new management of sales items can realize the management of "actual consumption and actual sales" of medical prescription materials. Brand-new sales management, realizing scientific and perfect inventory management and settlement management of hospital sales materials. New sales management, realize the scientific and perfect inventory management and billing management of hospital sales materials. Comprehensive supplier management, realizing perfect qualification management and accounts payable management. The new management system of "sales items" realizes the scientific and perfect inventory management and settlement management of hospital sales materials. Powerful early warning system to improve the inventory, quality and supplier qualification of the material beforehand management ability, to avoid losses after the fact. ? Comprehensive decision support analysis system, providing scientific basis for management and improving the hospital logistics management level. ? Realize the integrated application management of logistics and costing, accounting, budgeting, performance and other systems, realize the *** enjoyment and joint checking of the data of each system to ensure that the accounts are in line with the accounts, and give full play to the integration of the benefits of hospital management information resources.Establishment of cost accounting information management system of Beijing Chaoyang Hospital Classification by cost composition Classification by cost composition
Effect of implementing cost accounting ? Standardize the basic work of cost accounting ? Promote the construction of information system ? Improvement of hospital service quality and efficiency ? Improve labor efficiency ? Hospital operating costs are effectively controlled
Effects of implementing cost accounting Effects of implementing cost accounting ? Improvement of hospital service quality and efficiency Dynamic real-time understanding of the efficiency and effectiveness of the hospital's various links ? Comparison of 2009 with the same period of the previous year ? 10% increase in the number of outpatient and emergency room visits 19% increase in hospital discharges 5% increase in average cost of medicine for discharged patients ? Average charge per bed day increased by 2% ? 21% increase in total hospital revenue
Effects of implementing cost accounting ? Improvement of labor efficiency ? The hospital has implemented internal paid services, the provision of services and goods between hospital departments are settled according to the hospital's internal service prices, the department that uses the resources to pay the cost, the department that provides the resources to get the income, improve the labor efficiency of the hospital's departments, and effectively control the hospital's ineffective costs. The effect of implementing cost accounting ? Hospital operating costs have been effectively controlled
Reaching effective cost control and improving operating capacity ? During the period of carrying out cost accounting from 2004 to 2009, Chaoyang Hospital's business revenue, income, total assets, fixed assets and net assets all showed continuous growth. ? It should be pointed out that this increase in business income and revenue was realized in the context of rising medical costs caused by the year-on-year decrease in the drug price difference rate (from 21.79% in 2003 to 14.08% in 2009), the substantial decrease in the hospital's profit from drugs, the year-on-year rise in employee salaries, the year-on-year increase in resource costs (e.g., energy, materials, infrastructure), and the continuous improvement in medical technology. realized. However, the average increase in medical costs (16.89%) is only 0.43% higher than the average increase in operating revenues (16.46%), which is not easy to achieve. In other words, without the implementation of cost accounting, the sharp increase in healthcare costs would surely lead to serious losses for hospitals in today's social resource and policy environment. Effective cost control is reached and operational capacity is improved ? As a result of the cost accounting work, the per capita medical cost of outpatients and inpatients, the cost of consultation and the cost of bed days have been effectively controlled, reflecting the development concept of Chaoyang Hospital of "increasing the number of visits and decreasing the per capita", and reflecting the great efforts made by the hospital in solving the problem of "difficult to see the doctor and expensive to see the doctor". It reflects that Chaoyang Hospital has made great efforts in solving the problem of "difficult and expensive medical treatment". The experience of implementing cost accounting Optimize the allocation of hospital resources Standardize the business management process of the hospital Promoted the establishment of target cost ? Establish a comprehensive hospital budget system based on cost accounting ? Establishment of business performance index system The experience of implementing cost accounting? Optimize the allocation of hospital resources Show the cost sources and composition of each accounting unit. Improve resource utilization and reduce waste Effectively curb the phenomenon of "three competitions". Competition for equipment, personnel, and space. Standardization of hospital business management process Managers can grasp the overall situation of the hospital. Understand the cost status of all departments Realize the consistency of cost accounting data and financial accounting data information
Experience of the implementation of cost accounting? Establishment of business performance indicator system ? Cost return rate ? Cost per capita ? Salary cost rate ? Medical equipment yield rate ? Fixed cost rate Controllable cost rate ? There are more than 200 indicators to choose from
Medical Program Costing ? Medical project cost accounting allows hospitals to have a clear understanding of the actual cost of each medical project and its revenue, and the cost components of medical projects, thus realizing the refined management of hospitals and departments. Project Costing The completion of project costing lays a solid foundation for the implementation of DRGs-compliant costing and the realization of standard clinical pathway management in hospitals. ? Through the comparative analysis of medical project cost and medical pricing, it will be able to provide the relevant government departments with the basis for scientific and reasonable medical pricing. Theory and Methods of Project Costing I. Theoretical Basis (a) Based on the results of full costing of the department ? Take the medical department for example: the relationship between the cost of the medical department and the cost of the project is:
∑A medical department of the cost of each medical project = the cost of the department + the cost of cooperation (labor/materials/equipment depreciation, etc.)
Theory and method of project costing (b) Based on the "cost ratio coefficient method" Accounting theory ? The overall principle of project costing is that "the costs of medical items that can be directly accounted for are directly accounted for, and the costs of medical items that cannot be directly accounted for are apportioned according to a proportionality coefficient". The unit cost of an item = (directly charged to the item + shared cost* proportionate factor of the item)/workload
Theory and methodology of project costing
Analysis of the overall costing of medical items
Analysis of the operation of Chaoyang Hospital (FY2007 for example) (FY2007, for example) Analysis of Chaoyang Hospital's current operating conditions (FY2007, for example) III. Annual operating conditions of Chaoyang Hospital IV. Analysis of costs and revenues of Chaoyang Hospital's medical service programs 1. Surgical category (categorized loss rate 74.35%) ? Inspection category (categorized loss rate 46.10%)
Instrument and equipment category (categorized loss rate 45.39%) V. The data show ? In the past, the compensation method based on the headcount could only solve the problem of 71% of all retirements. The value associated with the skilled labor of medical staff has been grossly underestimated. The proportion of labor cost of Chaoyang Hospital only accounts for 18.92% of the total cost, while it accounts for about 50% in developed countries and regions. If the labor cost is adjusted to this level, Chaoyang Hospital will lose 67,000,000 Yuan in 2007, therefore, the small profit based on the financial compensation is at the expense of the fundamental rights and interests of the majority of medical staff. The cost of medicines, materials and large-scale examinations Drugs, materials and large-scale inspection revenue is still the basis of the hospital's survival, a so-called reduction in the price of medicines and drugs and large-scale equipment inspection fees as a means of solving the problem of expensive medical care, is bound to push the operation of the hospital to a more chaotic situation. The price and the law of value of the violation: leading to the undervaluation of health care labor, labor momentum decline; check and medication overmedication, drug materials circulation link chaotic and other symptoms of the proliferation; (the average profit rate of the financial industry 18.7%; communications and information services industry average profit rate of 24.7%; the average profit rate of the transportation industry, 17.1%; Beijing and the Shanghai Municipal **** 43 third-level Grade A hospitals excluding financial subsidies average loss rate of 5.84%) ? The destruction of the law of supply and demand: leading to the scarcity of supply-side resources, resource inefficiency, insufficient supply of services, service quality can not be guaranteed, etc.Encouragement Compensation The management role of the project costing thinking about the implementation of the costing of innovative points ? Accumulate a little experience for the hospital to carry out cost accounting ? Consistency and interface between accounting and costing results ? More than 200 indicators can dynamically reflect the operating results of hospitals. Provide information support for governmental decision-making and cost control mechanism. Construct a scientific and reasonable evaluation system for hospital cost and economic management ? Informatization construction promotes the improvement of management efficiency
Conclusion: ? Change the pursuit of revenue scale growth to the overall utilization of hospital resources ? Form a hospital cost management and control mechanism ? Reduce the waste of health resources ? Introducing the concept of enterprise management into hospital management, providing scientific analysis and evaluation methods
DRGs-PPS (Disease Diagnosis Related Groups: that is, hospitals know the amount of payment before providing each DRGs patient medical services, that is to say, the cost of DRGs, and the number of services received by the patient decoupled from the uniform cost of payment...). ) Fundamentals of Cost Containment ? DRG-PPS uses "per hospitalization" as the pricing unit, and in principle, the prices for the same DRG group are the same for all types of diseases. The total cost = the cost of each DRGs. Total cost = number of cases in each DRGs group × weight of each DRGs × rateDRGs (Diagnosis Related Groups) is translated as diagnosis-related classifications, the definition of which generally includes the following three parts: First, it is a program for patient classification. As a case combination method, the core idea of DRGs is to categorize cases with the same characteristics in a certain aspect into a group for easy management. Second, the basis of DRGs classification is the patient's diagnosis. On this basis, the impact of the patient's age, surgery or not, complications and comorbidities are considered. Third, it links the hospital's treatment of the patient to the costs incurred, thus providing a basis for the development of payment standards, especially the implementation of prepayment. DRGs were first developed in the U.S. In the 1970s, in order to scientifically evaluate medical care, the Yale University Health Research Center proposed a new type of inpatient case-mixing scheme through an analysis of 700,000 medical records from 169 hospitals, and named it DRGs for the first time. later, the federal government's Health Care Financing Administration (HCFA) funded the study based on the need for payment, and completed the second generation of the study. funding and developed a second generation of DRGs, which formed the basis for the current version. Similarities and Differences Between DRGs and Single-Payer Payments Similarities: Payment rates for both are pre-determined and based on disease diagnoses and ICD codes. Differences: There are only a few hundred DRGs groups, which can cover all kinds of diseases; while there are nearly 10,000 kinds of diseases, and single-disease payment can only choose a few kinds of diseases; in addition, DRGs are more scientific and reasonable than the combination scheme of single-disease payment. Features and advantages of DRGs ? DRGs take into account the severity and complexity of diseases, as well as the intensity of medical needs and medical resources, and are therefore considered a "patient-centered" case-mixing system. DRGs-PPS provides risk-sharing between health insurance and hospitals. The DRGs-PPS is a "patient-centered" case-mix system. Realizes the real sense of "total control", and motivates hospitals to take the initiative to consciously carry out "structural adjustment", self-regulation and management. Effectively control the excessive growth of costs and significantly shorten the length of hospitalization. Increase the utilization of outpatient, community medical services and rehabilitation services.