AHRQ's research is driven by the needs of users-patients, clinicians, health system leaders, and policymakers. The Agency's research provides the scientific foundation for the Nation's efforts to improve the quality, safety, effectiveness, and efficiency of health care. AHRQ supports the work of health services researchers at America's leading academic centers and maintains a rigorous intramural research program that collects and analyzes data to understand changes in health care quality, cost, use, and access. AHRQ also supports efforts to develop the tools and information used by the public and private sectors to measure and improve health care quality. This FY 2003 Annual Report highlights the research and financial management efforts of the Agency for Healthcare Research and Quality and its employees to develop more efficient and effective ways to fulfill the AHRQ mission while maintaining and protecting the integrity of the resources. The report brings to light major programmatic and managerial accomplishments and serves as an important tool to measure our progress and identify future challenges. In FY 2003, AHRQ made significant progress towards implementing each of the five President's Management Agenda (PMA) initiatives: strategic management of human capital, competitive sourcing, improved financial performance, expanded electronic government, and budget and performance integration. Many steps were taken to attract, retain, motivate, and reward a quality and high-performing workforce, including revamping the recruiting and hiring programs and creating a state-of-the-art, competency-based performance management system. By realigning the work done with our strategic goals and those of the Department, the integration of budget and performance improved.