<p>The challenges of medical insurance cost control and quality management for major or complex diseases are becoming increasingly prominent. This study analyzed the hospitalization costs of patients undergoing radical prostatectomy (RP) to explore the impact and effectiveness of diagnosis-related group (DRG) payment and clinical pathway (CP) management, providing insights for refined cost control. A total of 179 patients discharged after radical prostatectomy between April 2020 and May 2023 were selected. Based on the implementation timeline of DRG payment and CP management at our center, the patients were divided into three groups: the pre-DRG group (ordinary group), the DRG payment group and the CP management group. Factors such as length of stay, hospitalization costs, and cost composition were analyzed. The combined application of DRG payment and CP management demonstrated significant improvements. Compared to pre-implementation data, the average hospitalization cost decreased from 65,000 CNY to 44,200 CNY; the surplus ratio in DRG cases increased from 40.74% to 91.22%; the CP completion rate rose from 22.05% to 68.42%; and the length of stay for RP was reduced from 15.4 days to 10.4 days. No significant differences were observed in transfusion rates or surgical complications among the groups. Cost composition analysis revealed a decline in medication and consumable costs from 49.99% to 34.49%, while surgical costs increased from 17.61% to 36.50% (<i>P</i> &lt; 0.05). CP management and DRG payment exhibit strong synergistic effects. We addressed various challenges encountered during implementation and proposed solutions, effectively standardizing the treatment process for RP and reducing hospitalization costs. This study offers practical experience and a reference for cost control and comprehensive management in other major complex diseases.</p>