The aim of this paper is to analyze the operations of the Insula County Special Hospital for Psychiatry and Rehabilitation in the period from 2018 to 2022, based on financial and medical reports, before and during the Covid pandemic, and to evaluate their effectiveness with regard to income and expenditure in the context of current fiscal issues sustainability of the healthcare system in the Republic of Croatia. In order to better understand the hospital system of the Republic of Croatia, the organization and method of financing the health system of the Republic of Croatia is presented. The methodological basis of the work is financial and medical reports of ŽSB Insula in the period from 2018 to 2022, financial reports of HZZO and scientific works in the field of health economics that deal with the issue of fiscal sustainability of the health system. The methods of compilation and comparison, analysis and synthesis, and descriptive statistics were used in the research of the work. The research results showed that the Covid pandemic had a significant negative impact on the business of ŽSB Insula. Also, the paper presents other positive and negative challenges and trends in the business of ŽSB Insula within the framework of the existing problems of the health system with the aim of better understanding special hospital institutions. The conclusion of the paper is that for efficient financial operations that result in the provision of quality health care and user satisfaction, a complete transformation of the health system is necessary.