While insurance, the third-party payer, was introduce din the health care market, not only the moral hazard from consumer side, but also the supply side induced demands might become a serious problems and result in increasing health care resource consumed and high health care costs. Diagnosis Related Group, DRG, was introduced in American Medicare in 1983 and was regarded as a mechanism, which may increase the efficiency in the health care market. DRG system combined with prospective payment may result in significant improvement on performance of cost control in a health care institution. However, from the past experiences in many OECD countries, the quality of health care may be affected. Applying DRG system may also result in patient dumping and DRG creep. Peer-group organization is suggested to be an efficient method to avoid such possible outcomes following by application of DRG systems. This study tends to compare DRG system in OECD countries and some developing countries and make a systematic overview on previous finding and outcomes of DRG systems.