The poorest seven countries of the former Soviet Union (CIS- ) moved from a centralized system of health-care funding and delivery to a range of institutional and financial arrangements. The different paths chosen have implied different results in terms of available resources, internal efficiency, health-care inequality, and the corresponding incidence of public expenditures. This paper examines the level, composition and allocation of public spending on health, in light of the evolution of the health systems during the transition. The financial constraints experienced by CIS- countries were reflected in the decrease of health-care quality, the collapse of the already inefficient public health activities, and the increased incidence of out-of-pocket expenditures. These factors, alongside the increase in poverty, resulted in a decrease in health-care utilization, suggesting that these countries may experience difficulties in achieving the health-related Millennium Development Goals.