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Transition from planned to market economy and democracy caused dramatic changes in societal life in Russia, including values and institutional arrangements. This inevitably led to changes in development and implementation of social and health policy. To find effective mechanisms to achieve health policy goals Russian policy makers tied to learn from international experience, first of all countries with developed market economy and democratic institutions. Ddiffusion theory is useful theoretical approach to conceptualise the process of borrowing other countries’ practices meaning that ‘knowledge about policies, administrative arrangements, institutions in one time and/or place is used in the development of policies, administrative arrangements and institutions in another time and/or place’ (Dolowitz, D. and Marsh, D. (1996). ‘Who learns from whom: a review of the policy transfer literature. Political Studies XLIV: 344). In the paper diffusion it is used as an umbrella term to characterise situations when social institutions that successfully operate in one country are transferred to another country. At present the process of borrowing from other countries is accelerated by a number of social and economic factors, including globalisation and influence of international organisations. However, the question remains if “borrowed” institutions are appropriate for local conditions. To answer, first, it is necessary to evaluate other countries’ best practices to select ones that are suitable to a new envirenment, and second, ensure that they adequtely transferred, or adapted. In Russia diffusion coincided with transition that posed one more methodological and practical problem, namely the role of Soviet institutions (Semashko model) in Russian post socialist society, if they are compatible with the new societal environment. The aim of the paper is to analyse health care reform policies in Russia starting from early 1990-s from diffusion approach perspective. It is argued that international influence was “diffused” via two channels - general liberal market ideas and borrowing concrete institutional and financial aggangements, first of all compulsory health insurance (CHI). The role of international organizations that provided a lot of advice to the Russian government on social and health policy issues, first of all World Bank should also be stressed. Changes implemented in health care led to high social costs in terms of low population life expectancy, high mortality and morbidity rates and contribute to emergence of a number of problems in health system related to access and quality of health care. With certain limitations it might be taken as an evidence of a disfunction of CHI as an institution, its limited contribution to achievement of officially stated health policy goals. As a result, the public discussion in Russia still questions the decision to introduce CHI (as financial mechanism and system of interest), if it actually contributes to securing access to quality health care, how well it is embedded into Russian society taking into account a long tradition of free medicine in the country.