Pareto charts. Pareto charts are bar graphs with the bars ordered by height. They are often used to isolate the "vital few" categories on which we should focus our attention. Here is an example. A large medical center, financially pressed by restrictions on reimbursement by insurers and the government, looked at losses broken down by diagnosis. Government standards place cases into Diagnostic Related Groups (DRGs). For example, major joint replacements (mostly hip and knee) are DRG 209.4 Here is what the hospital found:

What percent of total losses do these 9 DRGs account for? Make a Pareto chart of losses by DRG. Which DRGs should the hospital study first when attempting to reduce its losses?