Abstract
This study evaluates the impact of Kazakhstan’s transition from a Diagnosis-Related Group (DRG) based payment system to global budgets (GB) in rural hospitals, addressing a gap in the literature on post-DRG health financing reforms. Using an interrupted time series design, we assess longitudinal policy effects in the absence of a control group, focusing on the immediate hospital response to GB implementation amid concurrent payment reforms. Monthly hospital-level administrative data are analysed to examine changes in both the level and trend of key performance indicators following the reform. The introduction of GB was associated with reductions in overall hospital admissions and surgical cases, suggesting improvements in resource utilisation. Although the average length of stay declined in line with theoretical expectations, the effect size was modest, indicating that efficiency gains were only partially realised. The Kazakhstani experience highlights that GB can serve to mitigate some of the inefficiencies observed under DRG systems, but effective implementation requires investments in management capacity, infrastructure, data systems, and well-calibrated incentives. These findings offer lessons for other low- and middle-income countries considering similar health financing reforms, emphasising the need for foundational support to translate payment innovations into measurable improvements in efficiency, quality, and equitable access in rural health systems.