The Croatian people are considered to enjoy a very good health status in comparison to its neighbouring countries. The same cannot be said for the Croatian Health Insurance Fund (CHIF) as since its establishment in 1993, it has struggled to achieve financial stability as continuous inefficiencies resulted in enormous debt generation. Based on the mechanisms of accountability and budget allocations this thesis has identified the main reasons behind the CHIF financial struggles. This thesis employed an Interpretivism approach in order to distinguish the history and the particular public and political cognitive features of CHIF. The Historical Institutionalism theory was employed in order to investigate possible path dependencies, which have affected the present state of CHIF. The secondary data gathered was both qualitative and quantitative. The research design has analysed the Croatian national insurance in three periods namely; 1974 constitution, 1993 health insurance law and 2002 health insurance law in order to detect the path dependencies affect the current state of CHIF in the present. The results from the analysis identified the overutilization of the secondary care and the generous sick leaves as the main effects behind the lack of accountability and poor budget allocations. The agents involved in the CHIF displayed no interests in breaking these path dependencies and thus resisting change.