This report first reviews the policy progress of China’s medical and health system reform in 2009-2018. The basic medical insurance system covers the whole people in China，and the medical insurance management system has been strengthened through the establishment of the National Medical Security Bureau. The reform of public hospitals has been continuously deepened in the medical service system，and the government investment has been increased to eliminate the problem of medical support with drugs；and the “4+7” pilot drug volume procurement has been implemented in the drug supply system. However，the relevant data shows that，while the government’s financial investment has increased significantly，the growth rate of drug revenue in public hospitals has not slowed down significantly. And the hierarchical diagnosis and treatment system for medical treatment has not been established，and the proportion of patients in three-level hospitals reached 51.5% and 46.4%. The drug pricing mechanism and medical insurance drug payment standard are still under experiment. In addition，the report also analyzes the challenges faced by China’s medical and health development and system reform，and puts forward corresponding policy recommendations.