Needs assessment is now a high priority, but it is conceptually muddled and technically difficult. In the past a variety of academic disciplines addressing different aspects of health care have produced a range of definitions on 'need' applicable to their own setting. In the context of the National Health Service Review, 'need' may best be defined as the ability to benefit from 'health care', which depends both on morbidity and on the effectiveness of care. An analysis of its relationship with 'demand', which is the health care that people ask for, and 'supply', which is provided, exposes the limitations of current information sources, and confirms that the formal assessment of needs will inevitably be a lengthy task. Despite these difficulties there is much that can and should be done incrementally to influence contracts between providers and purchasers towards meeting health care needs.