Priority setting (also known as resource allocation or rationing) occurs at every level of every health system and is one of the most significant health care policy questions of the 21st century. Because it is so prevalent and context specific, improving priority setting in a health system entails improving it in the institutions that constitute the system. But, how should this be done? Normative approaches are necessary because they help identify key values that clarify policy choices, but insufficient because different approaches lead to different conclusions and there is no consensus about which ones are correct, and they are too abstract to be directly used in actual decision making. Empirical approaches are necessary because they help to identify what is being done and what can be done, but are insufficient because they cannot identify what should be done. Moreover, to be really helpful, an improvement strategy must utilize rigorous research methods that are able to analyze and capture experience so that past problems are corrected and lessons can be shared with others. Therefore, a constructive, practical and accessible improvement strategy must be research-based and combine both normative and empirical methods. In this paper we propose a research-based improvement strategy that involves combining three linked methods: case study research to describe priority setting; interdisciplinary research to evaluate the description using an ethical framework; and action research to improve priority setting. This describe-evaluate-improve strategy is a generalizable method that can be used in different health care institutions to improve priority setting in that context.