This paper reviews the performance of Polish health care system from an economic perspective. High on the reform agenda of the government for several years, a new national health insurance system entered into force on 1 January 1999. This reform marked an important shift from a centrally controlled, budget-based system to a decentralised insurance-based system, operating through multiple regional funds and a special fund with nation-wide coverage. The reform is also intended to encourage the development of primary care services and in this context to promote the role of family doctors. However, the new system suffers from certain deficiencies and has not so far attracted active public support. This paper examines some of the efficiency problems, costs issues and equity concerns that remain to be addressed. It presents a series of policy options for further improvement of the system, including ways of enforcing harder budget constraints on health funds and better defining minimum ...