It is one of the priorities of the new round of healthcare reform to develop regional healthcare alliances through vertically integrating resources. This paper reviews the framework and characteristics of Shanghai’s healthcare system, and then analyzes its strengths and weaknesses, underscoring Shanghai’s exploration in the vertical integration of medical resources as a response to the pressing issues in healthcare. The paper outlines the main tasks and groundwork of the Shanghai healthcare alliance initiative and gives an outlook on the expected outcomes. It ends with some thoughts on the problems and challenges confronting regional healthcare alliances in Shanghai.