ObjectiveIn light of the comprehensively implemented reform of medical insurance payments, this study analyzed the impact of the payment intervention and COVID-19 pandemic on hospitalization expenses for identical diseases between traditional Chinese medicine (TCM) and Western medicine hospitals, to provide evidence to promote high-quality coordinated development of hospitals and insurance while reducing patient load. MethodsFrom January 2014 to December 2020, we gathered data including 9 900 individual medical records of woman-related malignant tumors (WMT) from all 23 public hospitals in a district of Shanghai. We developed an interrupted time-series analysis model based on the above two interventions, to compare the inpatient average per-time expenses between different hospitals and different groups. ResultsThe average per-time expenses of WMT in Western hospitals changed from rising to declining after the policy intervention, and increased again during the pandemic. In TCM hospitals, the expenses continued to increase and fluctuated after the pandemic. ConclusionThe policy intervention has achieved a good effect on controlling the cost of Western hospitals, rather than the significant increase in TCM hospitals. Meanwhile, the COVID-19 pandemic has had a significant impact on hospitalization expenses. It’s urgent to develop a payment model that fits the development and characteristics of TCM, to control the unreasonable growth of expenses. Moreover, the financial compensation methods and supervision mechanism of public hospitals should be improved to effectively resist the threat of public health emergencies for the development of hospitals and the legitimate rights of patients.