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Background: With market-oriented economic and health-care reform, public hospitals in China have received unprecedented pressures from governmental regulations, public opinions, and financial demands. To adapt the changing environment and keep pace of modernizing healthcare delivery system, public hospitals in China are expanding clinical services and improving delivery efficiency, while controlling costs. Recent experiences are valuable lessons for guiding future healthcare reform. Here we carefully study three teaching hospitals, to exemplify their experiences during this period. Methods: We performed a systematic analysis on hospitalization costs, health-care quality and delivery efficiencies from 2006 to 2010 in three teaching hospitals in Beijing, China. The analysis measured temporal changes of inpatient cost per stay (CPS), cost per day (CPD), inpatient mortality rate (IMR), and length of stay (LOS), using a generalized additive model. Findings: There were 651,559 hospitalizations during the period analyzed. Averaged CPS was stable over time, while averaged CPD steadily increased by 41.7% (P<0.001), from CNY 1,531 in 2006 to CNY 2,169 in 2010. The increasing CPD seemed synchronous with the steady rising of the national annual income per capita. Surgical cost was the main contributor to the temporal change of CPD, while medicine and examination costs tended to be stable over time. From 2006 and 2010, IMR decreased by 36%, while LOS reduced by 25%. Increasing hospitalizations with higher costs, along with an overall stable CPS, reduced IMR, and shorter LOS, appear to be the major characteristics of these three hospitals at present. Interpretations: These three teaching hospitals have gained some success in controlling costs, improving cares, adopting modern medical technologies, and increasing hospital revenues. Effective hospital governance and physicians' professional capacity plus government regulations and supervisions may have played a role. However, purely market-oriented health-care reform could also misguide future healthcare reform. [ABSTRACT FROM AUTHOR]