Using electronic medical data, we calculated emergency department physician performance and subsequent outcomes on a measure used in the Centers for Medicare & Medicaid Services' Physician Quality Reporting System. The measure assesses use of guideline recommended antibiotics for community acquired pneumonia. Physicians met measure criteria in 70.6% of cases at one institution. Among patients admitted to the hospital, measure compliant cases had a significantly shorter length of stay, lower costs and lower intensive care utilization than measure failures. For measure failures admitted to the hospital, antibiotic treatment was adjusted to be measure compliant within 48 hours in 57.1% of cases. Use of electronic performance measurement for antibiotic treatment of community acquired pneumonia identified variations in physician performance. Measure compliance correlated with significantly improved patient outcomes and lower costs.