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# Hypothesis Testing & Confidence Interval: Hospital Charges

See attached file.

Using the spreadsheet attached (and please send the completed document back), please use MegaStat to answer the following questions:

1. Do charges incurred by a patient depend on the type of insurance the patient has? If so, how? This is a hypothesis test where we could examine the average charges for patients with "managed care" vs. average charges for patients with "commercial" insurance. Could also use confidence intervals to help answer this question.

2. Do charges incurred by patients depend on which doctor treats them? If so, how? We could create a confidence interval for each doctor, then see if the true population mean for each could be the same. If not, which doctor is most expensive?
3.What is an appropriate linear regression for Charges vs. Days in the hospital? Are Charges related to Days, Physician, and/or Payor? If so, how?

#### Solution Summary

The solution provides step by step method for the calculation of testing of hypothesis, confidence interval and regression analysis. Formula for the calculation and Interpretations of the results are also included.

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