The world is facing an intensive aging of the population, as well as an increase in healthcare costs. As a result, it is necessary to consider the financial sustainability of the healthcare system and the efficient use of resources. These issues, along with the increase in healthcare costs in GDP, became the most important motives for the reform of healthcare system in almost all countries of the world. The paper aims to analyze existing data on costs and financial performance and assess the financial viability of hospitals in Serbia. Quantitative and qualitative deductive analysis of data from WHO, OECD, World Bank, and Serbia’s budget was used. If hospitals in Serbia are to operate sustainably, it is necessary to modify the Strategy for Optimizing the Network of Healthcare Institutions in Serbia until 2035. The research points to the need to introduce a clearly defined package of health services within mandatory health insurance. The healthcare system is efficient if it provides maximum quality services with minimal costs within allocated resources. The global economic crisis caused by the COVID - 19 pandemic showed that the public source of funding is unstable and it is necessary to find alternative sources. This led to health sector reforms in almost all countries of the world. The most acceptable solution is to introduce compulsory health insurance with a rationally defined package of services. As there is no ideal solution and result, the success of the undertaken reforms in the field of healthcare remains to be constantly reviewed.

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