The central government of China launched a large‐scale, expensive health reform in April 2009 because of the serious health‐related problems in the country. This reform aims to re‐establish a universal healthcare system, which is expected to provide affordable basic healthcare. Independent two‐sample t‐test, one‐way ANOVA and chi‐squared test were conducted to analyze the effect of the health reform on health resource allocation and service utilization in Chinese county hospitals. First, we described the hospitals' financial performance in terms of funding sources, balances and fiscal compensations (for personnel expenditure). Second, we discussed the total number of health personnel as well as the structure (number of medical personnel per thousand population and ratio of doctors and nurses) and quality of the health personnel. Lastly, we investigated the county hospitals' health resource utilization, bed occupancy and average medical expense per visit. Then, we probed different reasons and provided multiple approaches to existing problems. Copyright © 2016 John Wiley & Sons, Ltd.