Background: Since 1990, more than 120 partner hospitals have participated in 15 projects using a collaborative benchmarking approach developed by SunHealth Alliance. Example: Medical records project. Twenty hospitals focused on activities that could reduce accounts receivable days in medical records for Medicare inpatients. Thirty-five key practices, as identified by correspondence and site visits for four benchmark hospitals, were reviewed with all 20 hospitals. Example: Pneumonia project. Four hospitals focused on reducing the length of stay and mortality rates for pneumonia (DRG [diagnosis-related group] 89) patients. Each hospital formed internal task forces, who reviewed comparative data, analyzed their hospitals' internal care processes, determined opportunities for improvement, and chose best practices for implementation-including standardizing the sputum-collection process and developing a clinical path. Meeting the challenge. Hospitals should strive for innovation, seek new goals of and share their successes with other hospitals.