Objective To analyze the changes of the revenue and expenditure structure of public hospitals in X City, and put forward optimization strategies for revenue and expenditure structure. Methods Descriptive analysis was conducted on the data of medical income (medical income and fiscal revenue) and expenditure (personnel expenditure, costs of materials for health and drug costs) of public hospitals in X City. The structural variation degree analysis method was used to quantitatively analyze the degree and trend of changes of the revenue and expenditure structure of public hospitals. Results The fiscal revenue showed a positive change, while medical income showed a negative change. Among medical income, drug and nursing income showed negative changes, while medical services income showed overall positive changes except for nursing income. Among outpatient revenue, the revenue of materials for health had the highest correlation, followed by treatment income. Among inpatient revenue, nursing income had the highest correlation, and treatment income ranked second. Conclusions The proportion of drug income in public hospitals has decreased significantly, while the income from physical examination and materials for health have replacing growth, indicating the need to regulate the physical examination and the use and management of materials for health in hospitals.