This article discusses the applicability of the new institutionalism to the politics of health care reform in postcommunist Central Europe. The transition to a market economy and democracy after the fall of communism has apparently strengthened the institutional approaches. The differences in performance of transition economies have been critical to the growing understanding of the importance of institutions that foster democracy, provide security of property rights, help enforce contracts, and stimulate entrepreneurship. From a theoretical perspective, however, applying the new institutionalist approaches has been problematic. The transitional health care reform exposes very well some inherent weaknesses of existing analytic frameworks for explaining the nature and mechanisms of institutional change. The postcommunist era in Central Europe has been marked by spectacular and unprecedented radical changes, in which the capitalist system was rebuilt in a short span of time and the institutions of democracy became consolidated. Broad changes to welfare state programs were instituted as well. However, the actual results of the reform processes represent a mix of change and continuity, which is a challenge for the theories of institutional change.