Mandatory community-acquired pneumonia (CAP) protocol usage was proposed in our community-based teaching hospital because of senior medical staff perceptions that excessive variation in CAP care was adversely affecting clinical outcomes and costs. The purpose of our study was to examine CAP process of care variation, outcomes, and costs to ascertain whether the mandatory CAP protocol could be justified. The study consisted of an analysis of administrative and sampled chart data. We looked at pneumonia severity, orders for blood cultures or sputum staining, antibiotic usage, symptom resolution, length of stay, discharge status, readmission risk by follow-up time, and financial data. We found that process of care variation was low, clinical outcomes were generally good, and CAP care was profitable. Our data suggested that the proposed mandatory CAP protocol was not necessary. Our experience supports the management principle that fact finding should usually precede decision making, not the reverse.