Narrative medicine is an interdisciplinary subject of narratology, literature and modern medicine, and it advocates methods such as perusing literary works and writing parallel medical records to cultivate the abilities of medical personnel to listen, interpret and respond to stories, so as to promote medical humanities actually into clinical practice. Irrational medical treatment includes over medical treatment and inadequate medical treatment, and its causes can be divided into three domains: knowledge, economy and relationship. This paper mainly summarizes the role of narrative medicine in correcting irrational medical treatment in three fields of knowledge, economy and relationship, namely, to complement evidence⁃based medicine in the knowledge field, to revise medical consumerism in the economic field, and to reshape the doctor⁃patient community in the relationship field. It also explores how narrative medicine can empower hospital management and how to build a harmonious doctor⁃patient relationship in the new situation, so as to provide novel ideas for promoting high⁃quality development of hospitals.