Objective To explore the performance management intervention effect and optimization mode analysis of prefecture-level city hospitals under the reform of diagnosis-intervention packet (DIP) payment system. Methods Taking Deyang peopel’s hospital as the research object and 2021 as the time node of the DIP payment system reform. The data related to the hospital’s operational performance before the implementation of DIP payment (2019-2020) and the hospital’s operational performance after the implementation of DIP (2021-2022) were collected. The performance management evaluation system of Deyang peopel’s hospital was constructed based on game combination weights. The performance management level of Deyang People’s Hospital was measured, and the changes in hospital performance before and after the implementation of DIP payment system reform were analyzed through the construction of the interrupted time series model. Results After the implementation of DIP payment system reform in Deyang People’s Hospital, it had a significant impact on drug revenue, consumables revenue, and medical service revenue (P<0.05). Among them, drug revenue, examination revenue, acceptance revenue before the DIP payment system reform all showed a downward trend, medical service revenue showed an overall upward trend. However, there was no significant impact on the average hospitalization days of the patients, inpatient per capita medical costs, outpatient per capita medical costs, and the proportion of hospitalization income from the health insurance fund for patients (P>0.05). Conclusion The implementation of the DIP payment system can effectively improve the comprehensive level of performance of Deyang peopel’s hospital.