Impact of integrated care models on inpatient costs and health services efficiency: evidence from a difference-in-differences analysis in China

Integrated care effectively addresses challenges like high costs and low efficiency in healthcare. This paper investigates the impact of integrated care models in urban China on inpatient costs and health services efficiency, and explores variations by age category, chronic disease status, and healthcare institution. Data is sourced from the insurance claims database in Guangzhou (2012-2015). Seven integrated care models are introduced at different times during the study period. The propensity score matching with staggered difference-in-differences approach is employed to examine the effects of integrated care models on inpatient costs [total inpatient costs and out-of-pocket (OOP) spending] and health services efficiency [length of stay (LOS)]. After matching, 147 healthcare institutions are included, with 44 in the intervention group and 103 in the control group. There are 1721 institution-month-level observations in the intervention group and 3746 observations in the control group. Integrated care models reduce total inpatient costs (6.6%), OOP spending (17.3%), and LOS (3.3%) across all healthcare institutions. For patients aged ≥60 years receiving care in primary/secondary care institutions, there are notable decreases in total inpatient costs, OOP spending, and LOS. However, for patients aged ≥60 years in tertiary care institutions, integrated care models do not significantly affect these three outcomes. Additionally, patients with chronic diseases in primary/secondary care institutions also experience reductions in total inpatient costs, OOP spending, and LOS. Integrated care models in urban China contribute to lower inpatient costs and higher health services efficiency, particularly for older adults and patients with chronic diseases who are receiving care in primary/secondary care institutions. These findings have important policy implications for the implementation of integrated care models in urban China.