Abstract: Amid challenges of adapting to an aging society and maintaining sustainable healthcare financing, DRG forms a comprehensive suite of healthcare management tools, serving not only as a payment management tool but also encompassing budget management and healthcare quality control. However, further exploration of DRG's potential, which includes stimulating intrinsic motivations, and maximizing its positive incentive effects, requires continuous exploration and implementation. This paper discusses the standardization of clinical practices, localization of guidelines, minimization of iatrogenic harm, and popularization of economic evaluation, with the aiming of optimizing clinical pathways, standardizing medical practices, and balancing the challenges and opportunities of cost control and clinical innovation under the DRG payment model.