in recent years, the focus of China’’s supply side reform is the reform of public hospitals in china. This paper analyse the effectiveness of government regulation and of the influencing factors of the doctors and patients expected profits through the establishment 4 stage dynamic game model involved the doctors, patients and the government as the subject, and combined with the status quo of China’’s medical industry, puts forward the restriction mechanism of the moral risk of public hospital supplier in China and the corresponding policy recommendations.