ObjectiveSimulating the mean medical expenses of outpatient and inpatient according to abolish Drug Mark-up and add medical service fee which will be promoted to the whole country. Method: The data came from a tertiary hospital in Yangzhou City, Jiangsu Province which included outpatient and inpatient medical expenses during 2005 to 2015. Using the standards in Beijing City and the method in Baoji City, Shaanxi Province, we set Plan 1 and Plan 2 respectively. The indexes included mean medical expenses, drug proportion, patient flow and compensation. The SAS 9.3 Statistical software also used to collect and analyze the data. Results: ①The mean medical expenses of outpatient and inpatient showed a slow growth trend after inflation-adjusted. Annual average increase rate were 9.75% and 7.68% respectively; ②The results from Plan 2 were lower than the actual expenses. It shows that the lost was caused by policy related losses, which should be provide subsidies by the local government. But the results from Plan 1 were higher than the actual expenses. It means that the standard of medical service fee should be cut.③Taking the actual expenses of outpatient and inpatient as standard, we formulated Plan 3 and Plan4. The relative average error were 7.99% and 2.47%, closed to the actual expenses.④After adjustment of the hospital policy, the outpatient service was reduced by 14.05%, among which the specialist clinics was reduced by 14.61%, the general service was reduced by 3.96%.⑤Both of the Plan 1 and Plan2 medical insurance fund compensation percentage were higher than before. Conclusion: The formulation and implementation of the new medical program is not only effectively alleviated the situation of difficulty of getting specialist, but also made drug proportion reduce. However, the government should also pay attention to the policy related losses caused by the implementation of the new policy. It is necessary to formulate compensation schemes according to the local conditions