1.1 Background: Since Diagnosis Related Groups (DRGs) systems were firstly introduced in USA in 1983, they have begun to be implemented in more developed countries and some developing countries among the world during two decades. As one of the prospective payment systems, it focuses on enhancing the efficiency through reduction in the length of stays in hospitals, and improves the health care services by decreasing and controlling the unnecessary treatments. This paper reviewed the impacts of DRGs both in the countries with long period’s implementation and in China, including the above beneficial outcomes and negative influences in health care delivery. Furthermore, considering the current concerns of health care delivery in Mainland China, this paper discussed the difficulties and challenges in widely implementation over the whole country. 1.2 Methods: This study focused on the published papers in English through Pubmed, Google scholar, Google and in Chinese through CNKI. The articles in Chinese were searched from 1994. A literature search of all articles was conducted using keywords such as DRGs, impacts, efficiency, and quality both in English and in Chinese, so that relevant studies had been chosen according to the aims of the review. 1.3 Result: This review revealed the beneficial outcomes within health care delivery after the implementation of DRGs, which focused on the decrease in average length of hospital stay and the medical expenses per case. In addition, the relevant adverse outcomes had been reflected simultaneously through the studies, which were mainly indicated through the increase in emergency visits and mortality rates. The findings included both the benefits DRGs brings and negative outcomes, and the current effects of DRGs in Mainland China. 1.4 Conclusion: Diagnosis Related Groups (DRGs) system plays the different roles in different kinds of health care systems. It controls the medical expenses through less hospital activities, which can be indicated by the decreases in both the lengths of hospital stay and medical expenditures per case through the literatures. However, this system may produce the adverse outcomes within health care delivery due to insufficient, intentional, and cost-saving services. Furthermore, China has introduced this payment system since 1994, and needs to overcome the challenges through the gradual implementation process. / published_or_final_version / Public Health / Master / Master of Public Health