Impact of Diagnosis-Intervention Packet (DIP) Payment Reform on County Hospitals: Evidence from Z City, China

DIP implementation creates significant challenges for county hospitals through patient diversion to primary facilities and increased competition with municipal hospitals. This threatens to create a cycle of declining volume, revenue, and capabilities. To prevent rural patients from being forced to seek care at distant urban facilities, policy interventions should focus on providing targeted support to maintain county hospitals' vital role in rural healthcare delivery.