The reform of public hospitals is the emphasis and difficulty of China’s new medical reform. Based on the definition of the difficulty and expensiveness to see a doctor, public hospitals and its public welfare, the article expounded the main effects of public hospitals reform, and made a deep analysis of the challenges from the indistinct public welfare nature, the imperfect compensation mechanism, the weak management and internal operation mechanism, and the unbalanced medical talent allocation. Finally, some targeted suggestions were put forward.