To cement the 5 years’ staged achievement of new medical reform so as finally achieve the objective of medical reform, public hospital would become the aim of reform in the following stage. On one hand , canceling “using drug to supple health care” in public hospitals has came into the crucial stage; on the other hand, the government needed to increase financial input and ensure the implementation of security fund. What was the relation between these two reforms? Therefore , based on the survey of county-level public hospitals in G Province, relationship among government compensation method, hospital public profit operation mechanism and profit-driven operation mechanism were analyzed; besides, different financial insurance mode had different operation efficiency. Because the construction of hospital expense under public profit operation mechanism was more reasonable , the required government insurance fund was less, which only accounted 32.9%of the required fund under the profit-driven operation mechanism. Therefore, the policy suggestions that government need to “buy the mechanism” and “be brave to implement ‘subtraction reform’” were proposed.