This study explores the implementation effect of the diagnosis-based point payment policy in medical insurance. A retrospective analysis was performed on the clinical data of discharged patients. Taking January 1, 2018, as the time boundary for policy implementation, three core indicators before and after the policy reform, including average length of hospital stay, average hospitalization cost, and readmission rate, were compared. The results showed that the average hospital stay and average hospitalization cost were significantly reduced after the implementation of the diagnosis-based point payment policy. In conclusion, the medical insurance payment reform based on disease points can effectively shorten patients’ hospital stays and reduce inpatient treatment costs, thereby offering favorable practical value. Nevertheless, the policy’s implementation still faces deficiencies in refined management. It is essential to improve the refined management system for disease classification and further enhance the implementation quality and comprehensive effectiveness of medical insurance payment policies.