The traditional and mutually accepted covenant between academic medicine and society had its origin in trust and was based on the premise that academic medicine's programs and commitments were in society's best interests, thus justifying generous support and the privilege of self-regulation. In contemporary times, this mutually supportive covenant is encountering substantial distress. The most noteworthy threats to the traditional covenant are the changing values and erosion of trust emanating from the competition model of delivering and paying for medical services. A creditable response to society's needs and expectations can be best undertaken by establishing a national agenda in academic medicine that places a high priority on health services research and the scientific analysis of our entire health care system. What is needed now is the institutionalization of health services research through expansion of the cadre of health service researchers, while providing a broader emphasis on academic rewards and recognition for initiatives in this critically needed area of investigation.