This paper presents a version of the household production theory to explain the demand for health. In this study we have explored the factors that influence the demand for medical services and medical expenditures in Taiwan. A negative binomial model was used to study the demand for medical services. We found that the demand for medical services and medical expenditures are related to household composition, household income, family size, occupation of the household head, and living environments. In addition, we found higher usage of medical services on average for those households with medical insurances other than the national health insurance.