BACKGROUND: Despite the publication of guidelines for the management of pneumonia, significant variation in care continues to exist. While there have been several published reports of quality improvement projects for pneumonia, there are few data on the effectiveness of these efforts in small hospitals. The purpose of this study was to demonstrate that a project implemented by a quality improvement organization in small hospitals would lead to an improvement in care that could not be accounted for by secular trends in the management of pneumonia. METHODS: Medicare-insured hospital admissions for pneumonia were reviewed from 20 small hospitals in Oklahoma (intervention group) at baseline and after feedback. Project intervention included onsite feedback presentations to the medical staff, samples of performance improvement materials, and comparative measures of performance of predefined quality indicators. A second group of 16 demographically similar hospitals (control group) was selected for review during the same 2 periods. These hospitals subsequently underwent an identical intervention with a follow-up assessment. RESULTS: Statistically significant improvements in process measures were demonstrated in the intervention hospitals, including performance of a sputum (P<.01) and blood (P<.001) cultures, antibiotic administration within 4 hours of hospital admission (P<.001), and administration of the first dose of antibiotic in the emergency department (P<.001). These measures in the control hospitals did not change significantly (P =.93, .08, .79, and .52, respectively) during the 2 periods. CONCLUSIONS: Improvements in processes of care achieved by the intervention hospitals resulted from activities initiated because of participation in a quality improvement organization-directed project. This study demonstrated the effectiveness of quality improvement activities in very small hospitals.