Health financing in Bulgaria isorganized in a way that should, in theory, allow the systemto deliver good performance. In particular, the nationalhealth insurance fund was set up to provide universalcoverage, and the provider-payment system contains elementsof international best practices. The hospital-centricservice delivery structure is not well targeted to thepredominant and growing burden of non-communicable diseases,and loopholes in the provider-payment system reinforce thisbias toward expensive hospital care. The first part of thisreport presents a health financing diagnostic to assist theGovernment of Bulgaria in developing health financing reformoptions that improve the efficiency, equity, and long-termsustainability of the Bulgarian health system. The secondpart reviews the reform agenda currently envisaged by thegovernment with a focus on health financing aspects. Itpresents practical suggestions, drawn from internationalexperience, which should support the government as it movestoward implementing its reform agenda. These suggestions aimto enhance the reforms’ capacity to address some of theperformance gaps highlighted in part one with respect toefficiency, sustainability, and capacity to providefinancial protection.