BACKGROUND: The Chinese government launched a comprehensive reform of public hospitals, including a zero-markup drug policy (ZMDP) and adjustments to the price compensation mechanism for medical services. We aimed to assess the impact of the reform on economic burden for chronic obstructive pulmonary disease (COPD) inpatients. RESEARCH DESIGN AND METHODS: Health care institutions were selected using judgmental sampling. Structural variation analysis was conducted to assess changes in the cost structure. An interrupted time series analysis was used to evaluate level and trend changes in medical costs. RESULTS: After the reform, the total cost, western medicine cost, and traditional Chinese medicine cost per visit decreased significantly, with monthly downward trends ( CONCLUSIONS: The reform reduced the economic burden of COPD inpatients, optimized the cost structure and improved the efficiency of health insurance utilization. However, the short-term substitution effect of medical services on medicines weakened the cost-reduction effect.