IntroductionAmong others, the healthcare system in Serbia was one of the sectors most affected by the decades of reforms that began after the collapse of the former Yugoslavia, followed by hyperinflation, wars and bombings of NATO (Kunitz, 2004). Similar to other parts of the former Yugoslavia, Serbia has also implemented a compulsory healthcare system financed through health insurance contributions with the aim of providing comprehensive healthcare benefits for both inpatients and outpatients to the entire Serbian population. Health insurance contributions were based on payroll taxes of 12.3% (McCathy, 2007). However, with growing political problems affecting the healthcare system as well as other measures of economic performance, the method of financing the Serbian healthcare system was put to the test, especially with regard to the dichotomy between inpatient and outpatient care. As a result, there has been a notable deterioration in healthcare which has widened the gap between the EU and Serbian populations. Furthermore, the burden of bridging the gap between healthcare revenue and healthcare spending fell on the unsuspecting and vulnerable population. This shortage or gap between income and expenditure has also led to salary cuts for health workers, lack of adequate availability of medical facilities and poor investment in medical infrastructure (Hjelm et al, 1999). There were huge deficits in the Insurance Fund. Accessibility to healthcare, the fundamental right of every human being, has collapsed under corruption, bribery and lack of medical facilities (Mosseveld, 2003). All these conditions have led the Serbian government to reevaluate its healthcare funds and mark them as a national priority. Accordingly, the Institute of...... middle of paper ......ing in New EU Member States, Controlling Costs and Improving Quality”, The World Bank Working Paper No. 113.“Health Care Spending in the new EU Member States” (2003), World Ban Working Paper Hjelm K et al. 1999. “Beliefs about health and illness essential to the practice of self-care: a comparison of Yugoslavian and Swedish migrant diabetic women,” Journal of Advanced Nursing 30(5) 1147-1159.Kunitz SJ. 2004. “The Making and Breaking of Yugoslavia and Its Impact on Health,” American Journal of Public Health 94(11) 1894-1904.Miller FH, 2006. “Consolidating Pharmaceutical Regulation Down Under: Policy Options and Practical Realities,” University of Queensland Law Journal 26(1)111Mosseveld C., 2003. “International comparison of health spending”, PhD ThesisMcCathy M. 2007. “Serbia rebuilds and reforms its health system”, Lancet 369.