| Public hospitals are the main body of hospitals in our country, they are charged with the important responsibility to protect people’s health. The reform of public hospitals will enable the public hospitals to better play their main role. By establishing a new compensation mechanism and affecting medical services’ behavior, the payment reforms has become one of the focus of public hospital reform. Whether payment reforms help to establish an effective constraints and incentives to improve medical services and quality, and help public hospitals to get rid of the traditional inefficient operation mode, return to public welfare and efficiently allocate medical resources, thus ensuring the interests of all stakeholders and achieving continuous operation and steady development, these are all important issues that we are faced with during the deepening medical reform. So research on the influence of payment reform on public hospitals’ efficiency in China has both theoretical and practical significances.In this paper, we first review the literature of medical insurance payment and hospital’s efficiency; then analyze the present situation of China’s payment reform’influence on public hospitals’ efficiency from positive and negative aspects respectively; Next, from the theoretical model to empirical analysis, we collected yearbook of health statistics for quantitative analysis, and found hospital efficiency changes in the law and payment reform has a positive effect on public hospital efficiency. Data envelopment analysis and regression analysis has been used to analyze technical efficiency and stochastic frontier analysis has been used to analyze cost efficiency before and after payment reform. Followed by a detailed analysis of positive-acting mechanism of payment reforms on the efficiency of public hospitals in China. Finally, corresponding countermeasures and suggestions are given on this basis, it has a certain reference value for our country to further deepen the reform of public hospitals.By the mutual authentication of theoretical analysis and empirical testing, the conclusions are as follows:overall payment reform has a positive effect on public hospitals’efficiency in our country. Empirical results show that with the implementation of payment reform, the hospital’s overall efficiency showed a rising trend, especially a significant increase in the cost efficiency, technical efficiency in general also showed a rising trend, but after one or two year of payment reform, the technical efficiency and cost efficiency appeared temporary drop, but then continue to rise. And it is also found that among many health economic policies, the payment reform has a positive and significant influence on public hospitals’ efficiency. This paper argues that payment reforms to enhance hospital efficiency, mainly through four areas to achieve-market competition mechanism, incentive mechanism, management mechanism and comprehensive evaluation mechanism. |