Diagnosis-Intervention Packet （DIP）is an effective, efficient and innovative medical insurance payment method which is suitable for China's conditions. The hospital in Shaoyang City focuses on the quality, disease groups and performance, improves the quality of medical records, medical insurance settlement statement and medical treatment, optimizes the disease structure from strategy, advantage and foundation, and builds the DIP performance system from the perspective of cost, value and supervision. The DIP reform goal of benefiting patients, developing hospitals, and making funds more efficient has been initially achieved.