Federal decisions on health policy should be informed by sound health services research. Inadequate funding is only part of the problem; improving the quality by improving the process for awarding grants and contracts is also necessary. The grants awards process of the National Center for Health Services Research differs in significant ways from the NIH process; the director can override decisions of study sections, and selection of study section members is less related to their research contributions. The awards process for other health services research is more difficult to evaluate because it is less open to scrutiny. Large scale demonstrations have design weaknesses which severely limit conclusions that can be drawn. Researchers tend to be too narrow in their approach to the health care system, while policymakers demand solutions with an unrealistic urgency. Few important changes occur so quickly that they cannot be affected by 12-25 months of analysis.