An important feature of health care systems in recent years is the change in the organizational position and relations of public sector hospitals. Health sector reforms have led to increasing heterogeneity in the organizational location and status of public sector hospitals and new organizational forms of public-private relations are being developed by and for hospitals. These changes can have important implications for health and health care. They raise issues around equity, control, accountability and performance of health care. Yet the policy process in practice may be failing to develop and implement appropriate forms of policy formulation on health sector reform. This paper focuses on the organizational position and relations of hospitals within public sector health services. It firstly outlines key elements of health sector reform and relates these to two dimensions of organizational change for hospitals: increasing heterogeneity and forms of public-private relations. The paper provides a descriptive format for classifying forms of hospital organizational change and proposes a framework of six questions for analysing these organizational forms. This may be used to assess the appropriateness of specific policies to particular country situations and to develop more open debate around hospital organizational forms.