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Health is a main target of all households and governments in all countries. To achieve this objective, there are government efforts in developing countries to tackle the problems facing the health sector by focusing on the supply side such as construction of new health care facilities. However, a growing literature on health care demand has pointed out that individuals are not passive recipients of health services. Rather, they make active decisions about whether or not to make use of provided health care services. Therefore, countries should also focus on the pattern of health care utilization (the demand side) beyond the merely provision of health care facilities (the supply side). This study analyzed the demand for health care services by identifying the factors that affect individuals' decisions to seek health care services and to choose among different providers. The study also answers the possible impact of user fee on health care demand in the case of Mekelle city. The nested multinomial logit (NMNL) estimated using full information maximum likelihood (FIML) technique that estimates both levels of decisions simultaneously.