With the transition of China economic system from central planning economy to market economy, the traditional China health system has gradually lost the basis for its existence. Since the early 1990s, China has undergone several stages of the health system reform. The government has issued series of policy texts. Some progress has been made. However, there are st ill many problems to be solved. For example, there are interfacial tension between rapid increase in medical fees and slow increase in China residents' income; tension between narrow coverage of public social welfare system and national demand for it, the tension between poor institutional health compensation and limited medical resource.