A safe, effective, and efficient clinical algorithm (management rule) for the care of adults with acute respiratory illness by nonphysician providers is presented. The algorithm was created from a data base collected on more than 5000 patients and prospectively evaluated on an additional 2637. It eliminates unhelpful diagnostic tests and minimizes physician involvement in patient care without compromising clinical standards, illness outcome, or patient satisfaction. Total direct medical care costs when the algorithm was used were approximately 40% of those costs generated by physicians managing similar patients, primarily because the algorithm directed an 80% reduction in a diagnostic test costs. The results suggest that significant savings can result when algorithms are used in the care of ambulatory patients with common illnesses.