Theoretical interpretation about the location and adjustment of the relationship between government and market which acts as the key transitional process of health system constitutes mainstream theories of health system reform. Reviews of the mainstream theories and its’ evolution demonstrates: the disputes of “government vs. market” and “demand-side subsidizing vs. supply-side subsidizing” on the health system transition in the new era of China, are in fact the disputes on the rationality of the methodology and theoretical assumption used in the mainstream theories of health system reform; with disputes evolving from “government vs. market” to “demand-side subsidizing vs. supply-side subsidizing”, the practice of the health system reform in the new era of China will lead to profound redeployment and adjustment of rights in health system, so that “property rights” should be the basic theoretical tool to interpret and lead the location and adjustment of the relationship between government and market.