In order to account for the role that hospitals play in health policy, this research paper will use and build customized health policy theory. The way in which health services are provided is heavily influenced by health policies. Due to its inflexible structure and misguiding policies, it is a well-known issue with the purchase of health insurance. Due to this, the appropriate resources are not allocated at the appropriate time, which results in reimbursement failure, health burden, and financial losses as a result of error in judgement or misunderstanding. Therefore, personalizing health policies to meet the requirements of specific people or groups is possible. The framework for making decisions to improve people's health status is known as health policy. The significance and problems with developing health policies are discussed in detail in this paper, along with methodological concerns. Methodological concerns are cited, and the majority of the works in this field are cited. After introducing the subject and outlining the need for health policy, it is explained from several academic perspectives and what a health policy is. The stages of the cycle for developing policies are discussed. The health policy development cycle is described in this review paper, along with the methodological concerns it raises. The study places further emphasis on evidence-based health policy and then describes the lessons that may be drawn from prior attempts at developing policy. The report finishes by outlining the difficulties in creating and implementing a successful health strategy.