Based on in-depth survey of township hospitals in Lushan County of Henan Province, this paper studies the development situations of rural medical care and health undertaking in the course of new medical reform. Results show that both rural medical institution and public health undertaking have considerable development in this course. Working capital situation gradually turns better. However, there are still problems and challenge of shortage of high quality medical care personnel, lack of employment mechanism, poor medical environment, and imperfect bidding and purchasing system of medicines. To further develop rural medical situation, it should improve medical environment, speed up informationization construction, and give prominence to functional orientation.