Abstract
BACKGROUND: Kazakhstan implemented a diagnosis-related group (DRG)-based payment system in 2012, transitioning from a fee-for-service remuneration model for public hospitals. The reform aimed to enhance hospital efficiency and cost control. A national rollout was preceded by a pilot phase involving 21 hospitals in 2011. While DRG systems are increasingly adopted and adapted globally, evidence on their effects remains limited in low- and middle-income countries. OBJECTIVE: To assess whether the introduction of the DRG-based system is associated with changes in hospital activity and the quality of care. DESIGN AND METHODS: A controlled interrupted time series design was employed, using matched control hospitals to estimate the causal impact of the payment reform. The analysis was based on weekly hospital discharge data from the 2011/2012 to 2012/2013 fiscal years, obtained from the Ministry of Health. RESULT: Findings suggest that the impact of the reform on hospital activity varied by hospital levels, with pilot hospitals showing a quicker response to nationwide implementation. No significant effects were observed on quality of care, as measured by standardised in-hospital mortality rates. CONCLUSIONS: The introduction of the DRG-based payment system was associated with heterogenous effects on hospital activity but did not yield measurable short-term improvements in care quality. These findings underscore the importance of implementation context and highlight the need for further research to assess long-term and system-wide effects.JEL classification: H51, I1, P36.