This book chapter provides a general overview on the recent development of China Healthcare Security Diagnosis-Related Groups (CHS-DRGs) and Big Data Diagnosis-Intervention Packet (DIP) in public hospitals. The initial objective is to enhance hospitals’ efficiency by better utilization of resources and cost reduction while improving patient’s quality and equity of service. This chapter is primarily based on the extant literature review of recent healthcare payment reforms and piloting schemes in certain cities in China, such as Beijing and Tianjin. The reform changes traditional fee-to-fee treatment to value-based treatment which imposes higher standards for hospitals’ IT infrastructure and internal controls. China’s complete adoption of CHS-DRG setting by the end of 2025 is expected to facilitate performance comparisons across the healthcare industry, at the same time leading to increased transparency in policy-setting. This chapter explores the possible future challenges faced by stakeholders by analysing the impacts on the piloting cities.