We developed a novel hospital payment, management system called Big Data Diagnosis & Intervention Packetby applying the case mix indexprinciples but the grouping is based on unique combination of ICD‐10, ICD‐9v3codes. The initial prototype of BD‐DIP was developed using hospital discharge records in Shanghai, then piloted in Guangzhou, China. Results from the pilot evaluation showed that introduction of the BD‐DIP lead to about5% hospital budget savings, notable improvement in hospital care efficiency. The implementation of hospital monitoring tools resulted in identification of potential irregular practices to enable further auditing, investigation. The BD‐DIP platform has a number of advantages over other payment models in terms of more homogeneous resource utilization within groups, design simplicity, dynamic in grouping