Objective To evaluate the effect of Beijing' s separation of clinic from pharmacy reform.Methods Use difference-in-difference method based on dataset on patients having Urban Worker Medical Insurance from twelve state-owned hospitals.Results The reform incurs a decrease in the outpatient and inpatient expenditure on medicine per visit (30％ and 21％,respectively),a decline in hospital's pharmaceutical ratio (9 percentages and 4 percentages,respectively); reduces the outpatient and inpatient expenditure per visit (19 ％ and 8 ％,respectively),with a decrease in the out-of-pocket part (23％ and 3％,respectively),and a slight increase in the Medical Insurance's part (2％); raises hospital's turnover (11％),outpatient's visits (22％),and inpatient visits (43％).Conclusion The reform encourages physicians to prescribe more scientifically,and hence reduces patient 's expenditure on medicine and hospital's pharmaceutical ratio; leads to a decrease in patience' s expenditure per visit;raises hospital's turnover; and doesn't cause a significant increase in the expenditure from social medical insurance.