Since August 2022, Shengzhou City of Zhejiang Province has been carrying out the reform of outpatient payment mode in medical insurance, gradually carrying out the reform of capitation by implementing the total budget, updating the calculation standard of capitation fee, improving the incentive and constraint mechanism and other measures, so as to encourage primary health care institutions to provide appropriate basic medical services, reduce primary medical expenses, and promote the sustainable development of medical insurance fund.

To analyze the influence mechanism of capitation for outpatient services in basic medical insurance on medical expenses in Shengzhou City, Zhejiang Province, and to provide reference for improving the relevant payment system.

Using "capitation" and "medical costs" as both English and Chinese search terms, databases such as CNKI, Wanfang, PubMed and Web of Science were searched for relevant literature on capitation from 2000-01-01 to 2022-07-31, as well as the policy documents, government reports and news reports related to the implementation of capitation from April to July 2022. Personal interviews were conducted with representatives of capitation payment policy makers and implementers in Shengzhou City from September to December 2022 (n=13) . A qualitative analysis of capitation reform policy on medical expenses under the total outpatient budget in Shengzhou City, Zhejiang Province was performed by using system dynamics approach.

The policies of the current round of medical insurance payment reform in Shengzhou were plotted as a cause graph with five feedback loops obtained, showing that the implementation of the total capitation budget policy can motivate primary health care institutions to provide standardized medical services for residents, promote an increase in the contracting rate in primary care, thus controling medical expenses; a scientific capitation fee standard can motivate primary health care institutions to autonomously control and reduce costs; increasing the reimbursement ratio of medical insurance can effectively reduce the medical burden of patients; improving the performance appraisal system is conducive to the continuous improvement of service capabilities of primary health care institutions; strengthening the construction of information sharing mechanisms can achieve data sharing and exchange, and comprehensively improve the health of residents.

The implementation of capitation reform in conjunction with multiple policy measures can improve the contracting and consultation rates in primary care institutions, broaden the sources of medical insurance fund, ensure the sustainability of medical insurance fund, improve the medical service and capabilities of primary care institutions, improve the health status of residents, and significantly improve the prevention and treatment effect of chronic diseases.