The Health Systems in Transition (HiT) profiles are country-based reports that provide a detailed description of a health system and of policy initiatives in progress or under development. HiTs examine different approaches to the organization, financing and delivery of health services and the role of the main actors in health systems; describe the institutional framework, process, content and implementation of health and health care policies; and highlight challenges and areas that require more in-depth analysis. Azerbaijan gained independence from the Soviet Union in 1991. Reform of the health care system in Azerbaijan has been incremental so that organizationally it still has many of the key hallmarks of the Soviet model of health care, the Semashko system. However, relatively low levels of government expenditure on health as a proportion of gross domestic product since independence has meant that out of pocket (OOP) payments accounted for almost 62% of total health expenditure in 2007. This has serious implications for access to care and financial risk protection for vulnerable households. The private provision of services is an increasingly important part of the health system, and services provided in parallel by other ministries and state enterprises continue to account for a certain amount of health expenditure. Revenues from the recent oil boom have been used to fund large capital investment projects such as the building of new hospitals with the latest technology and the import of modern equipment. However, future plans include the strengthening of primary care and the introduction of mandatory health insurance as part of major reforms to the health financing system.