Abstract: Objective To discuss the effect of capitation on the reduction of cesarean section rate. Method The influence factors of high cesarean section rate in China were analyzed,the insurance payment system domestic and foreign was compared,and the effect of capitation on the reduction of cesarean section rate was discussed.Results Capitation can reduce cesarean section rate,patients' payment and infant mortality rate.Conclusion Capitation in institutional delivery can reduce cesarean section without medical indications; doctors would follow the guideline of clinical pathway,so the repeat inspection and the unnecessary drugs were avoided.First-rate service and moderation medical were realized unified. This way doesn't only ensure the right of insured people,but also raise medical quality and hospitals' reasonable profit. Hospitals will pay more attention to health care and pregnant health education,the cesarean section rate and cost would lower down. Along with medical system reform,capitation will have social and economic benefits.It is strongly recommend to change the insurance payment system to reduce the cesarean section rate.