One of the fundamental rights of every human being is to enjoy "the highest attainable standard of health". Achieving better health requires no only adequate medical knowledge and technologies, laws and social measures in the field of health care, but also sufficient funding for fulfilling people's right to health. However, economic crisis has left every community with limited possibility of investing in health care and forced them to use the available resources more efficiently. This is the reason why health financing policy represents an important and integral part of the health system concerned with how financial resources are generated, allocated and used. Development of new drugs and medical technologies, population aging, increased incidence of chronic diseases as well as the peoples' rising demands from health care providers lead to a constant increase of health system costs worldwide. In these circumstances, countries in transition, like Serbia, face difficult challenges in financing their health systems. Current economic crisis and budget constraints do not allow the Government to simply allocate more public revenues for health and solve the people's expectations by increasing the spending. Instead, Serbia is forced to start reforms to provide a more efficient health system. The reform processes are positioned within the wider context of European integration and public administration reforms. This paper provides a short description of the health care system in Serbia focusing on the healthcare economics and reforms and their influence on financial sustainability.