Abstract:Breaking the mechanism of drug-maintaining-medicine was the key link of the comprehensive reform in public hospitals. The article summarized the reform and effects of breaking drug-maintaining-medicine and converting compensation mechanism for public hospitals. In addition, such hospitals are provided with the limited financial compensation, and the paper also pointed out that medical service price adjustment was not enough, the chain of interests between drugs and hospitals was not cut off. Based on such findings, the paper advised to improve the formation mechanism of medical service price, clear the responsibility of government, reform standards of medicare payment and strengthen the management and supervision of drug distribution and sales.