The book presents a background study of DRG-based payment systems, drawing on the experience of implementing such hospital funding arrangements internationally, including an overview of developments in the Asia and Pacific region. It underscores the need for countries to be clear about their purpose and objective for introducing Diagnosis Related Groups, as well as their place in health-care financing reform, and for policy-makers to reflect on the importance of country-specific starting points, objectives and context in which the hospital payment reforms are being implemented. Chapter 4 – written by Yuki Murakami and Luca Lorenzoni – investigates the evidence regarding the impact on cost, quality and efficiency of the introduction of a DRG-based payment system.