Using the 2002/03 Uganda National Household Survey data we empirically examine the nature and determinants of individuals’ decision to seek care on condition of illness reporting. The major findings include: cost of care is regressive and sustainability reduces the health care utilization for any formal provider by the poorer individuals afters controlling for other factors. In other words, even among public facilities cost of care remains a barrier to utilization of these services. Second, there is no doubt that putting in place strategies aimed at increasing the income of the poor will increase their utilization of the health facilities, though the impact will be higher for private care. Third, besides income and cost and cost of care, other factors in particular qualify of services, education and physical access proxied by distance to the facilities are important determinants of health care utilization. Four, as much as it is important for the government to improve provision of services in the public facilities, incentives should be put in place to encourage and strengthen the role of the private sector. At the same time there is need, to put in place a regulatory system, set standards and a monitoring framework to ensure quality of services and control prices in the private sector especially in the private for profit sub-sector. Clearly there is an increasing preference for the sector’s services even after the abolition of cost sharing.[email protected].