Bryant/Smith Case 42: Hopsital Charges

Bryant/Smith Case 42: Hopsital Charges

GM 533 Keller Graduate School of Management Date: 02/14/2010

Bryant/Smith Case 42: Hospital Charges

EXECUTIVE SUMMARY
The research is done to find the solutions for some of questions like; the relationship between the doctors and their charges, the type of insurance having its effects on its customers and if there is any relationship between charges, payor and physicians. The data that is used in this research analysis to find the proper equation model for the relationship between payor, physicians and charges and number of days stay at the hospital, is from the Bryant/Smith Case 42 Hospital Charges (Appendix 1). As described in the case, the hospitals revenues are determined largely by the patients insurance coverage. The data being used are for normal delivery of babies. The null hypothesis test states that there is no relation between the patients with managed care insurance and patients with commercial insurance. This means there is no difference between the patients with either insurance. The alternate hypothesis states that patients with managed care insurance are paying more than patients with commercial insurance. The 95% confidence level was chosen to calculate hypothesis test, and regression analysis. Based on the hypothesis test, that was conducted to compare the difference between the two different insurances, it is concluded that patients with managed care insurance are paying more charges than the patients with commercial insurance. Hypothesis test was also conducted to check whether there is a difference between the charges related to physicians. It was concluded after doing the test that, physician#2 has the highest charges among all the physicians. Linear Regression Analysis is conducted to see if there is any relationship between the DAYS and CHRGS, PHYS, and/or PAYOR. After running several models with different independent variables, it is concluded that there is a linear relationship between DAYS and CHRGS.

INTRODUCTION
The purpose of this report is to prepare a data model based on some of the questions like; whether the patient is charged more based on the insurance, or whether the physicians have different charges for their patients, and/or if the charges (CHRGS) are related to days (DAYS), physicians (PHYS) and/or payor (PAYOR). The data that is used to prepare the report contains four variables; hospital stay in DAYS, charges that are charged to the patients in CHRGS, type of the physician treated the patient in PHYNS and the type of insurance the patient is carrying in PAYOR. The data was given in the Bryant/Smith case 42: Hospital Charges.

ANALYSIS AND METHODOLOGY

I am doing Descriptive Statistics, Hypothesis Testing, Confidence Interval and Regression analysis; Linear and multiple. Descriptive statistics 2

Bryant/Smith Case 42: Hospital Charges As mentioned in the text, descriptive statistics is a science of describing the important aspects of a set of measurements (Bowerman). The measures of central tendency measures mean, median and mode. The measures of variation measures range, standard deviation and variance. The mean is sum of numbers divided by the total numbers. As explained in encyclopedia2 of the free dictionary website, the arithmetic mean is found by adding the numbers and dividing the sum by the number of numbers in the list (Farflex, Inc). This is what is most often meant by an average. The median is the middle value in a list ordered from smallest to largest (Farflex, Inc). The mode is the most frequently occurring value on the list (Farflex, Inc). The hospital doctors are not the employees of the hospital, but they have control over certain functions such as prescribing medicines to the patients and also prescribing them the stay at the hospital for further advanced treatments (Bryant-Smith, 2003). Ill start my research analysis with the comparison of two insurances; managed care insurance and commercial insurance. The question being asked in the case study is, Do charges incurred by a patient depend on the type of insurance the patient has? (Bryant-Smith, 2003) In respect to answer the above question I have started my research with running some descriptive statistics. Here, in this research analysis, I have separated the DAYS and CHRGS by the insurance. That means the patients who carry managed care insurance and those who carry commercial insurance. Patients who carry commercial insurance are only 96 and patients who carry managed care insurance are 193. The total number of patient data that are studied here is 289. Comparison between Managed Care Insurance and Commercial Insurance Lets just look into the managed Care Insurance. The mean of $2714.28, is the average charge of one day stay at the hospital when the patient has managed care insurance. This means that, those patients who have managed care insurance, pay average of $2714.28 per day. Similarly, the mean of 2.02 days means that the average stay of the patient at the hospital carrying managed care insurance is 2.02 days. For Managed care insurance, the median for charges is $2789.00 and for days it is 2 days. These values tell us that these are the middle values in a list when sorted by the insurance type. For managed care insurance the mode is $2840 for the charges and 2 days for the days. Descriptive statistics
DAYS 193 2.30 1.18 1.09 1 14 13 1.17 1.08 CHRGS 193 2,966.44 1,429,843.96 1,195.76 929 14898 13969 1,422,435.44 1,192.66

Count Mean sample variance sample standard deviation Minimum Maximum Range population variance population standard deviation

Bryant/Smith Case 42: Hospital Charges As measures of variation measures range, variance and standard deviation, we will look at the data that were calculated for Managed Care insurance. The range is largest measurement minus the smallest measurement. By definition, population variance is the average of the squared deviations of the individual population measurements from the population mean . The population standard deviation is the positive square root of the population variance. For the managed care insurance, range is $13969 for charges and 13 for days. The population variance is $1,422,435.44 for charges and 1.17 for days. The population standard deviation is $1192.66 for charges and 1.08 for days. Specifically, range does not give us any good idea about the data. As range is just the difference between maximum value and minimum value, it does not provide us good representation of the entire data set. We are 95% confident that the average charges of the patients carrying managed care insurance is in between $2796.67 and $3136.21. Similarly, the average stay at the hospital by these same patients is in between 2.15 days and 2.45 days at the 95% confidence level. Now lets look into Commercial Insurance. The mean of $2966.44, is the average charge of the one day stay at the hospital when the patient has commercial insurance. This means that, those patients who have commercial insurance, pay average of $2966.44 per day. Similarly, the mean of 2.30 days means that the average stay of the patient at the hospital carrying commercial insurance is 2.30 days. For Commercial insurance, the median for charges is $2673.50 and for days it is 2 days. These values tell us that these are the middle values in a list when sorted by the insurance type. For Commercial insurance, the mode for charges is not available as there is none repetitive values but for the days, mode is 2 days. As explained above for the range, variance and standard deviation, the range for commercial insurance is $4031, which is the difference between the maximum charge of $4933 and minimum charge of $902. Similarly, the range for days of stay at the hospital is 2 days is the difference between maximum days if say 3 days and minimum stay of day is 1 day. The population variance for charges is $444,669.76 and for days it is 0.33 days. The standard deviation for charges is $666.84 and for days it is 0.58 days. As the population of data is large, we are 95% confident that the charge for the patients carrying commercial insurance is in between $2578.46 and $2850.10. Similarly for days, it is in between 1.90 days and 2.14 days at 95% confidence level. After comparing the two insurances, I have come to the conclusion that patients who carry managed care insurance pay more than those patients carrying commercial insurance. But just be looking at the data, in the descriptive statistics does not help us reach the conclusion that managed care patients are paying more charges for the services than commercial insurance patients. So I have decided to run the hypothesis test to see if my conclusion agrees with me. Hypothesis Test Hypothesis test is a statistical procedure to provide the evidence against or in favor of the hypothesized statement or the claim. Here we are to compare two different samples or variables, 4

Bryant/Smith Case 42: Hospital Charges managed care insurance and commercial insurance. I claim that managed care insurance patients are paying more charges and so to see if my claim is true, I will run hypothesis test. Let 1 = Charges to the patient of Managed Care insurance and 2 = charges to the patient of Commercial insurance H0: 1 = 2 versus Ha: 1 > 2 The null hypothesis states that there is no difference between the charges that are charged to patients carrying managed care insurance and patients carrying commercial insurance. The alternate hypothesis states, that patients who carry managed care insurance pays more charges than the patients who carry commercial insurance. I have used here 2-sample test with unknown variances. This test is used to compare two individual variables with different variances. We are here comparing two different variables; managed care insurance and commercial insurance and both of them have different variances. So this test is going to be useful in determining whether managed care insurance is more expensive then commercial insurance. I chose the significance level of alpha to be 0.05 because I am running the tests with 95% of confidence level. So that leaves me with 0.05 significance level of alpha. The test statistic t is 2.30. The critical value t.05 is 1.645. Since t = 2.30 > t.05 = 1.645, we reject H0 at the 0.05 level of significance. Since test statistic t = 2.30 is greater than critical value t.05 = 1,645, we reject null hypothesis, that states that there is no difference between the charges charged to patients with managed care insurance or to patients with commercial insurance. In conclusion, we accept alternate hypothesis that stats that after the difference between managed care insurance and commercial insurance, it is proved that managed care insurance has much higher charges than commercial insurance. At the significance level of alpha = 0.05, we have a strong evidence that the null hypothesis states that there is no difference between managed care insurance and commercial insurance is false. Another question in the case study is to find out if there is a difference among the charges of the physicians. There seem to be two types of physicians; one of them has very high charges compared to other physicians and one physician has the lowest charges than others. The charge for physician#2 seems to be highest among all the physicians. To check, whether my assumption is right, I am conducting a 2-sample unknown variance hypothesis test. Let 1 = physician#2 with highest charges and 2 = all other physicians 5

Bryant/Smith Case 42: Hospital Charges H0: 1 = 2 versus Ha: 1 > 2 The null hypothesis states that there is no difference between the charges of the physicians. The alternate hypothesis states that physician#2 has the highest charges amongst all other physicians. The 2-smaple test with unknown variances is conducted to find out if any one of the hypothesis is true. The significance level of alpha chosen is t.05. Since t = 14.31 > t.05 = 1.645, we reject H0 at significance level of alpha = t.05. In the conclusion, we have strong evidence at significant level of alpha = 0.05, that there is difference between the physicians and that one of the physicians or physician#2 has the highest charge amongst all. Linear Regression Analysis Linear Regression Analysis is conducted to check whether charges depend on Days, Physicians or the Payor. I chose CHRGS (charges) as the dependent variable and DAYS, PHYS and PAYOR as individual dependents. I ran three types of model, each with different variable. After running all three different models, I concluded that the best model is CHRGS vs. DAYS. The reason behind choosing this model is that its correlation coefficient is R = 0.801 and coefficient of determination is R2 = 0.641. The correlation coefficient R and coefficient of determination R2 is far away from 1 in all other models. The regression equation is: Y = 930.7042 + 884.2014 * DAYS The slope is b1 = 884.2014. This means that for each increase in DAYS of stay, there will be expected increase in CHRGS (charges) by about $884.20. In other words, with every increase of a day of stay, there will be additional charges of $884.20. The coefficient of determination is R2 = 0.641 This means that 64.1% of variation in CHRGS (charges) can be explained by variation in DAYS. The large percentage of the variation in CHRGS is explained by the independent variable DAYS, this model is a good fit for data. The p-value for F test is p = 7.50E-66. This means that we have Extremely Strong evidence of a linear relationship between DAYS and CHRGS (charges). The hypotheses for F test are: H0:1 = 0 vs. Ha:10 This test tells us that if we reject H0, then we have evidence of a linear relationship between the two variables; DAYS (x variable) and CHRGS (y variable). Thus a small p-value for the F-test is evidence of a significant linear relationship between the variables. 6

Bryant/Smith Case 42: Hospital Charges The correlation of coefficient is R = 0.801, which indicates a strong positive correlation between DAYS and CHRGS. Correlation Coefficient R is greater than 0, this means that correlation is positive. This also means that an increase in DAYS (day of stay) will increase CHRGS (charge per day). It is also concluded that the correlation is very strong because R = 0.801 ia very much close to 1.

CONCLUSION
Based on the hypothesis test, that was conducted to compare the difference between the two different insurances, it is concluded that patients with managed care insurance are paying more charges than the patients with commercial insurance. Hypothesis test was also conducted to check whether there is a difference between the charges related to physicians. It was concluded after doing the test that, physician#2 has the highest charges among all the physicians. Linear Regression Analysis is conducted to see if there is any relationship between the DAYS and CHRGS, PHYS, and/or PAYOR. After running several models with different independent variables, it is concluded that there is a linear relationship between DAYS and CHRGS. In the last I would like to include that the assumptions that I made by looking at the data were reached in true manner and to mu satisfaction.

Bryant/Smith Case 42: Hospital Charges Appendix 1 Data from Bryant/Smith Case 42 Hospital Charges.
Variable DAYS CHRGS PHYS PAYOR Meaning is the number of days the patient stays in the hospital is the total expense charged to the patient is the code identifying the physicians indicated the type of insurance the patient carried.

1 for managed care and 0 for commercial insurance

DAYS 2 4 4 3 3 2 2 3 2 2 3 3 2 3 14 3 3 2 2 3 2 3 2 3 1 3 2 1 2 3 2 2 CHRGS 2607 5063 4903 3418 3604 2324 2953 3709 2138 2681 3932 3283 3729 3392 14898 3819 4248 1905 2823 2785 2921 4933 2804 3287 2048 3617 2219 3381 2310 2907 2888 2640 PHYS 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 PAYOR 1 1 1 1 0 1 1 1 1 0 1 0 1 1 1 1 1 1 1 0 0 0 0 1 1 0 0 0 1 1 1 0 DAYS 2 2 2 3 2 2 3 3 2 2 3 2 1 2 1 3 2 1 3 2 2 3 2 3 3 3 3 3 2 2 2 2 CHRGS 2439 2609 2357 3503 2026 1854 2644 2500 2798 2629 2697 2308 1663 2222 2741 2891 2898 1924 3480 1874 3906 1254 2137 3430 3041 4146 3059 2864 2403 2979 2683 3034 PHYS 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 6 6 6 6 6 6 6 6 6 6 6 6 6 6 PAYOR 1 0 1 1 0 1 1 1 1 1 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Bryant/Smith Case 42: Hospital Charges

DAYS 3 2 2 1 1 2 3 3 3 2 1 2 2 2 2 2 2 3 2 2 2 2 2 3 2 3 1 2 1 2 2 2 1 2 3 1 2 2 2 1 2 2 CHRGS 3826 2840 3137 2955 2184 3500 3585 3047 4475 2711 2062 2280 2939 2334 2809 2620 3090 3945 2435 1864 2592 2017 2666 2955 3204 2066 1793 2638 1840 3182 2218 2612 2789 1590 3868 2178 2665 2739 2314 2070 2292 2594 PHYS 2 2 2 2 2 4 4 4 6 6 6 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 PAYOR 0 1 0 0 0 1 1 1 0 1 0 1 1 1 1 1 1 1 1 0 1 1 0 1 1 1 1 1 0 0 1 0 1 1 1 1 1 0 1 0 0 1 DAYS 2 1 3 3 2 2 3 2 3 2 1 2 2 2 2 1 2 3 2 2 2 3 2 2 2 2 3 2 2 1 2 2 3 2 2 2 2 3 2 2 3 2 CHRGS 2436 1960 2753 2209 2378 3230 3636 3279 2873 2797 2167 1701 3165 2358 3306 2139 3355 3375 3173 2900 2838 3160 2343 2285 2117 3112 3394 3663 2528 1806 3115 2780 2724 2263 2550 3194 2954 2798 2176 3202 3779 3458 PHYS 6 6 6 6 6 6 6 6 7 7 7 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 PAYOR 1 0 1 0 1 1 1 0 1 0 0 0 0 0 0 1 1 1 0 1 0 1 1 1 1 1 1 1 1 1 0 0 0 0 1 0 0 1 0 1 1 0

Bryant/Smith Case 42: Hospital Charges

DAYS 1 3 2 2 2 2 3 2 1 2 2 1 2 2 2 2 2 3 1 2 2 2 2 2 3 2 2 4 2 3 3 6 2 3 2 2 2 2 2 2 2 3 CHRGS 902 2935 3032 2289 4206 1973 3454 3848 2886 2752 2602 1899 2334 2692 3693 2582 2123 3708 2078 2067 2840 2563 3064 2157 2647 2649 2745 6340 3757 4510 3492 6710 3183 2494 2352 2449 2473 2534 2158 2408 2468 2133 PHYS 7 7 7 7 7 7 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 PAYOR 0 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 0 0 0 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 0 0 0 1 0 1 1 0 DAYS 2 2 1 2 2 3 2 3 3 3 2 3 2 2 2 2 2 2 3 2 2 2 2 2 3 1 2 2 1 2 1 2 3 2 2 2 2 3 2 3 2 2 CHRGS 3109 1567 2268 2858 2542 3218 2582 4185 4183 3289 2288 2564 2570 2944 2450 2207 3716 2247 4357 3050 2779 2991 2227 3270 4711 2081 2589 3768 2153 2522 2145 3455 3081 2251 2833 3077 2392 2181 2242 2687 2698 1023 PHYS 10 10 10 10 10 10 11 11 11 11 11 11 11 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 PAYOR 0 1 1 1 1 1 1 1 1 0 1 0 1 1 1 1 1 1 1 1 1 1 0 0 1 1 0 1 0 1 1 0 1 1 1 1 1 0 1 1 0 0

10

Bryant/Smith Case 42: Hospital Charges

DAYS 2 1 2 2 1 2 2 2 2 3 3 2 2 3 2 4 2 2 2 1 2 2 2 2 2 1 2 2 2 CHRGS 2310 2220 2566 2450 1947 2396 3073 2564 929 3369 2331 2543 4722 5633 2801 5499 3182 3800 2419 3675 2840 3105 2206 2741 2663 1953 2880 2424 2198 PHYS 11 11 11 11 12 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14 PAYOR 0 0 1 0 0 1 1 1 1 1 0 1 1 1 0 1 1 0 0 1 1 0 1 1 0 1 1 1 0 DAYS 2 2 2 2 3 3 2 2 2 2 1 2 2 2 2 2 1 2 2 2 2 2 2 1 3 2 3 2 CHRGS 2414 4674 3139 2465 4049 3464 3034 2941 2668 3001 1791 3118 2761 3094 2367 2827 2179 2347 1848 3128 2604 3017 3050 2068 3480 2312 3639 2534 PHYS 12 12 12 12 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 14 PAYOR 1 0 0 1 1 1 1 1 1 1 1 1 1 0 1 0 1 1 1 0 1 1 1 1 1 1 1 0

11

Bryant/Smith Case 42: Hospital Charges Appendix 2 Descriptive Statistics For Days And Charges Of The Patients Carrying Managed Care Insurance Descriptive statistics
DAYS 193 2.30 1.18 1.09 1 14 13 1.17 1.08 0.08 2.15 2.45 0.15 CHRGS 193 2,966.44 1,429,843.96 1,195.76 929 14898 13969 1,422,435.44 1,192.66 86.07 2,796.67 3,136.21 169.77

Count Mean sample variance sample standard deviation Minimum Maximum Range population variance population standard deviation standard error of the mean confidence interval 95.% lower confidence interval 95.% upper half-width empirical rule mean - 1s mean + 1s percent in interval (68.26%) mean - 2s mean + 2s percent in interval (95.44%) mean - 3s mean + 3s percent in interval (99.73%) Skewness Kurtosis coefficient of variation (CV) 1st quartile Median 3rd quartile interquartile range Mode

1.21 3.39 88.1% 0.13 4.47 99.0% -0.96 5.56 99.0% 6.77 70.34 47.22% 2.00 2.00 3.00 1.00 2.00

1,770.68 4,162.20 90.2% 574.92 5,357.96 97.4% -620.84 6,553.72 99.0% 5.62 51.70 40.31% 2,367.00 2,789.00 3,287.00 920.00 2,840.00

12

Bryant/Smith Case 42: Hospital Charges Appendix 3

Descriptive Statistics For Days And Charges Of The Patient Carrying Commercial Insurance

Descriptive statistics
DAYS 96 2.02 0.34 0.58 1 3 2 0.33 0.58 0.06 1.90 2.14 0.12 CHRGS 96 2,714.28 449,350.50 670.34 902 4933 4031 444,669.76 666.84 68.42 2,578.46 2,850.10 135.82

Count Mean sample variance sample standard deviation Minimum Maximum Range population variance population standard deviation standard error of the mean confidence interval 95.% lower confidence interval 95.% upper half-width empirical rule mean - 1s mean + 1s percent in interval (68.26%) mean - 2s mean + 2s percent in interval (95.44%) mean - 3s mean + 3s percent in interval (99.73%) Skewness Kurtosis coefficient of variation (CV) 1st quartile Median 3rd quartile interquartile range Mode

1.44 2.60 66.7% 0.86 3.18 100.0% 0.28 3.76 100.0% 0.00 0.07 28.70% 2.00 2.00 2.00 0.00 2.00

2,043.95 3,384.62 79.2% 1,373.61 4,054.95 93.8% 703.27 4,725.29 99.0% 0.60 1.62 24.70% 2,219.75 2,673.50 3,118.25 898.50 #N/A

13

Bryant/Smith Case 42: Hospital Charges Appendix 4 MegaStat Output Comparing Managed Care Insurance and Commercial Insurance Hypothesis Test: Independent Groups (t-test, unequal variance)
CHRGS-MC 2966.44 1192.66 193 CHRGS-CI 2714.28 mean std. 666.84 dev. 96 n 283 252.16000 109.55447 0 2.30 .0110 df difference (CHRGS-MC - CHRGS-CI) standard error of difference hypothesized difference t p-value (one-tailed, upper) confidence interval 95.% lower confidence interval 95.% upper margin of error

36.51497 467.80503 215.64503 F-test for equality of variance 1422437.9 444675.59 3.20 1.97E-09

variance: CHRGS-MC variance: CHRGSCI F p-value

14

Bryant/Smith Case 42: Hospital Charges Appendix 5

Descriptive Statistics For Hypothesis Test to Compare Physicians#2's High Charge with All other Physicians

Descriptive statistics
#1 252 2,793.58 595,734.48 771.84 902 6710 5808 2,304.00 2,675.50 3,115.75 811.75 2,741.00

Count Mean sample variance sample standard deviation Minimum Maximum Range 1st quartile Median 3rd quartile interquartile range Mode

Appendix 6 2-Sample t - Test Unknown Variables for Comparing Physician#2 with All Other Physicians.
Label Mean Sd N High CHRG PHYS 2 All Other PHYS 3489.49 2793.58 2.70 771.84 37 252

Label mean sd n Label mean sd n

PHYS 4 2611.19 2.19 21 PHYS 11 3028.87 2.47 30

PHYS 6

PHYS 7 PHYS 10 2856.76 2559.30 2786.26 2.36 1.98 2.06 25 40 54 PHYS 13 PHYS 14 3124.55 2742.00 2.20 2.00 20 28

PHYS 12 2787.24 2.03 34

15

Bryant/Smith Case 42: Hospital Charges Appendix 7 2-Sample T Test For Comparing High Charge Of Physician#2 With All Other Physicians. Hypothesis Test: Independent Groups (t-test, unequal variance)
High CHRG PHYS 2 3489.49 2.7 37 All Other PHYS 2793.58 771.84 252 251 695.91000 48.62338 0 14.31 1.12E-34 mean std. dev. n df difference (High CHRG PHYS 2 - All Other PHYS) standard error of difference hypothesized difference t p-value (one-tailed, upper) confidence interval 95.% lower confidence interval 95.% upper margin of error

600.14820 791.67180 95.76180 F-test for equality of variance 595736.9856 7.29 81719.75 1.49E-81

variance: All Other PHYS variance: High CHRG PHYS 2 F p-value

16

Bryant/Smith Case 42: Hospital Charges Appendix 8 Regression Analysis with Independent Variable DAYS and Dependent Variable CHRGS Regression Analysis
r r Std. Error ANOVA table Source Regression Residual Total 0.641 0.801 633.703 n k Dep. Var. 289 1 CHRGS

SS 206,041,299.1584 115,253,469.9142 321,294,769.0727

df 1 287 288

MS 206,041,299.1584 401,580.0345

F 513.08

p-value 7.50E-66

Regression output variables Intercept DAYS coefficients 930.7042 884.2014 std. error 93.8922 39.0355 t (df=287) 9.912 22.651 p-value 4.13E20 7.50E66

confidence interval 95% lower 95% upper 745.8997 807.3691 1,115.5088 961.0336

std. coeff. 0.000 0.801

Appendix 9 Scatter plot for DAYS and CHRGS

CHRGS vs. DAYS Regression Analysis 16000 14000 12000 CHRGS 10000 8000 6000 4000 2000 0 0 5 DAYS 10 15 y = 884.201 x + 930.704 R = 0.641

17

Bryant/Smith Case 42: Hospital Charges Appendix 10 Regression Analysis for independent variable PHYS and dependent variable CHRGS Regression Analysis
r r Std. Error ANOVA table Source Regression Residual Total 0.009 -0.092 1053.532 n k Dep. Var. 289 1 CHRGS

SS 2,744,807.3552 318,549,961.7175 321,294,769.0727

df 1 287 288

MS 2,744,807.3552 1,109,930.1802

F 2.47

p-value .1169

Regression output variables Intercept PHYS coefficients 3,105.4358 -25.5667 std. error 154.6158 16.2580 t (df=287) 20.085 -1.573 p-value 1.21E56 .1169

confidence interval 95% lower 2,801.1111 -57.5667 95% upper 3,409.7604 6.4333 std. coeff. 0.000 -0.092

Appendix 11 Regression Analysis for independent variable PAYOR and dependent variable CHRGS Regression Analysis
r r Std. Error ANOVA table Source Regression Residual Total 0.013 0.113 1051.328 n k Dep. Var. 289 1 CHRGS

SS 4,076,432.1016 317,218,336.9710 321,294,769.0727

df 1 287 288

MS 4,076,432.1016 1,105,290.3727

F 3.69

p-value .0558

Regression output variables Intercept PAYOR coefficients 2,714.2813 252.1592 std. error 107.3007 131.3025 t (df=287) 25.296 1.920 p-value 4.90E75 .0558

confidence interval 95% lower 2,503.0851 -6.2787 95% upper 2,925.4774 510.5971 std. coeff. 0.000 0.113

18

Bryant/Smith Case 42: Hospital Charges References Bowerman. Essentials of Business Statistics. McGraw-Hill Irwin. Bryant-Smith. (2003). Bryant-Smith: Practical Data Analysis Volume I. The McGraw-Hill companies. Farflex, Inc. (n.d.). Mean, median and Mode. Retrieved 02 18, 2010, from The Free Dictionary: http://encyclopedia2.thefreedictionary.com/mean,+median,+and+mode

19