The purpose of this study was to find out the restructuring strategy for five provincial hospitals through the business analysis and survey of the service area. Through the survey of the service area of 5 hospitals. service area was classified into three groups, such as underserved area, adequate area, and overserved area. The strategy for the restructuring the clinical departments was set up based on the result of the business analysis and characteristics of the service area. The result of the study was as follows; 1) Whether or not a provincial hospital has specialized in specific area according to the circumstances and the needs of the community was the major factor influencing on the operating result of the hospital. 2) Provincial hospitals at the underserved area has to invest according to the changes of the occupancy rate and increasing pattern of the number of patients while maintaining the status as a general hospital. 3) Provincial hospitals at the adequate area has to lower the grade from the general hospital down to the hospital first and has to upgrade the competency through the restructuring the clinical departments and investment in specific area. 4) Provincial hospitals at the overserved area has to lower the grade from the general hospital down to the hospital first and has to seek ways to change the hospital fundamentally into geriatric hospital, pneumoconiosis hospital or psychiatric hospital etc. Provincial hospitals incapable to compete with private hospitals and clinics has to lower the grade from the general hospital down to the hospital first, to specialize in specific area and to restructure some clinical departments into rental base or self-operating basis. In case such methods are judged not so good solution, provincial hospitals has to find out ways such as shut-down of several departments or operating under the attending system.