: This study attempts to find out the determinants of household healthcare expenditure. The analysis uses a multi-equation recursive estimation procedure to study the determinants of healthcare expenditure. First, it uses a binary logit model to estimate the probability of being ill, which is then used as an independent variable in the second stage logit model for provider choice. Ordinary Least Squares (OLS) estimates are obtained instead of Tobit estimates for the parameters of healthcare expenditure model in the third stage. This study brings out several interesting findings. First, the level of income has a significant effect on peoples’ choice of healthcare provider and on the amount of healthcare expenditure. Second, people with smoking habits and less access to safe drinking water and sanitary toilets are more vulnerable to diseases. Some of the factors ordinarily believed to affect the incidence of diseases like, education level of an individual, education level of the household head, and being male member of the family have a less pronounced effect on reporting illness and healthcare expenditure.