Objective: Taking public hospitals as the research object，it explores the impact mechanism of budget communication on budget performance from these two dimensions and overall level of budget communication，as well as the mediating role of psychological contract. Methods: Questionnaire is designed for the relationship among budget communication，budget performance and psychological contract. The empirical test is carried out by using statistical methods such as multiple regression analysis，structural equation model，and mediation effect test. Results: At the dimension level，the up-down and parallel formal budget communication of public hospital is positively related to budget performance，and positively related to all dimensions of psychological contract，while transactional and relational psychological contracts are positively related to budget performance; at the overall level，budget communication of public hospitals is directly and positively affects budget performance，and indirectly affects budget performance through psychological contract. Conclusion: Positive budget communication in public hospitals helps to build a good psychological contract，thus improving the efficiency and quality of employees，deepening the modern management of hospitals and effectively improving budget performance.