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Health has become a dominant economic and political issue over the past years, where many nations experience rapid rises in health care spending. The main reason why the health care sector does not operate entirely in accordance with economic market principles is the fact that inequalities in health and access to health care are understood as the lack of humanity and justice. Health care demands might seem as quite inelastic, but because of the health insurance, it shows a certain degree of price, income, cross - price and time elasticity. The subject of this study was the demand for health services in the Republic of Serbia in order to assess the ability of the public sector to meet the demand for providing these services. The underlying assumption was that public health can not adequately meet the needs of citizens due to insufficient investment in the sector and inefficient allocation of resources. To confirm this assumption, basic characteristics of health care market and the factors affecting the supply and demand for health services were discussed. Based on the analysis of investment in the health sector, the existing capacity and organization of health services, our research has shown that the public health system in the Republic of Serbia is not able to adequately meet the demand for health services. In the current economic situation in the Republic of Serbia, which already spends a significant portion of its GDP on health, there is no realistic possibility of increased spending on public health care system, although it can be expected that there will be increasing demand for health services and increase of costs. The health sector is not, and does not have the ability to be a perfectly competitive market, and the questions of its financing, rational and efficient organization is extremely delicate. However, health care economists and experts in health economics should give a significantly higher contribution in organizing health sector. Possible directions for solving these problems are complex and include clearly defined objectives for health policy, more efficient allocation of resources through the introduction of competition and incentive payment method for the service providers, including the private sector, clearly defining the package of services covered by compulsory insurance, promotion collateral insurance and the fight against corruption

Microeconomic principles in the health sector: The demand for health services in the Republic of Serbia