Abstract: DRGs as a management tool for a combination of case, gives different weights to different combinations through the thought of risk adjustment, the different combinations of different diseases are given different weights. To achieve the same area between different hospitals, different departments, the same clinical professional but different combination between disease and doctor team, between physicians at all levels to carry out analysis and evaluation in the service capacity and efficiency and quality. It provides an objective and credible scientific evaluation method for hospital performance management. Our hospital has integrated DRGs management idea into performance management since 2015. By improving the performance evaluation index system, the objectivity and scientific performance appraisal have been improved. Performance management has been recognized by medical staff. In the past two years, our hospital medical service capacity and hospital operation indicators have been proved continuously. Use of DRGs technology in hospital performance management practice has already played an important role in performance management evaluation, assessment and guidance. Although DRGs technology has some limitations in hospital management practice, it is still an effective management tool for more exploration, research and innovation.

Key words: DRGs, risk adjustment, hospital management, performance evaluation