Recent research into the cost of various medical procedures has shown the impact of certain complications encountered in surgery onthe total cost of a patient's stay in the hospital. The researchers used regression analysis and found the following results:Total cost for patient = Constant, plusax Length of stay (measured in days), plusbx Presence of one or more complications (= 1 if true, O if false), pluscx Use of a laparoscope (= 1 if true, 0 if false)where a, b, c are coefficients of the regression model. The laparoscope is an instrument somewhat like a miniature telescope with afiber-optic system that brings light into the abdomen. It is about as big around as a fountain pen and twice as long.The research, based on 52 patients, showed the following regression results:R-squared: 59%Constant term: $3,402Coefficients and t-values for independent variables:Coefficientt-valueLength of Stay$ 86011.19Complications$ 1,8674.73Laparoscope$ 9153.49Required:1. What is the estimated cost for a patient whose surgery has complications and who stays in the hospital 5 days, and whose surgeryrequires a laparoscope?Estimated cost

Given:Constant term: $3,402Coefficient for Length of Stay: $860Coefficient for Complications:…

Answered: Recent research into the cost of…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 32P

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Recent research into the cost of various medical procedures has shown the impact of certain complications encountered in surgery on the total cost of a patient’s stay in the hospital. The researchers used regression analysis and found the following results: Total cost for patient = Constant, plus a × Length of stay (measured in days), plus b × Presence of one or more complications (= 1 if true, 0 if false), plus c × Use of a laparoscope (= 1 if true, 0 if false) where a, b, c are coefficients of the regression model. The laparoscope is an instrument somewhat like a miniature telescope with a fiber-optic system that brings light into the abdomen. It is about as big around as a fountain pen and twice as long. The research, based on 63 patients, showed the following regression results: R-squared: 56% Constant term: $3,158 Coefficients and t-values for independent variables: Length of Stay Complications Laparoscope Coefficient $ 887 $ 1,912 $ 928 t-value 7.51 5.30…
how do you use a functional-based approach to figure out a cost per patient day in a hospital?
Regression; choosing among models. Apollo Hospital specializes in outpatient surgeries for relatively minor procedures. Apollo is a nonprofit institution and places great emphasis on controlling costs in order to provide services to the community in an efficient manner. Apollo’s CFO, Julie Chen, has been concerned of late about the hospital’s consumption of medical supplies. To better understand the behavior of this cost, Julie consults with Rhett Bratt, the person responsible for Apollo’s cost system. After some discussion, Julie and Rhett conclude that there are two potential cost drivers for the hospital’s medical supplies costs. The first driver is the total number of procedures performed. The second is the number of patient-hours generated by Apollo. Julie and Rhett view the latter as a potentially better cost driver because the hospital does perform a variety of procedures, some more complex than others. Rhett provides the following data relating to the past year to Julie.…
How can CVP Analysis be used to predict future cost and profitability? How can CVP analysis be used in a hospital setting?
A hospital services provider whose payer/payment mix is 95% fee for service can effectively reduce its financial risk by reducing its variable costs of production. True False
A sociologist was hired by a large city hospital to investigate the relationship between the number of unauthorized days that employees are absent per year and the distance (miles) between home and work for the employees. A sample of 10 employees was chosen, and the following data were collected. a. Develop a scatter chart for these data. Does a linear relationship appear reasonable? Explain. b. Use the data to develop an estimated regression equation that could be used to predict the number of days absent given the distance to work. What is the estimated regression model? c. What is the 99% confidence interval for the regression parameter 1? Based on this interval, what conclusion can you make about the hypotheses that the regression parameter 1 is equal to zero? d. What is the 99% confidence interval for the regression parameter 0? Based on this interval, what conclusion can you make about the hypotheses that the regression parameter 0 is equal to zero? e. How much of the variation in the sample values of number of days absent does the model you estimated in part (b) explain?
Carter Dry Cleaning has developed two regression analyses for cost estimation. The accounting manager has presented statistical measures for both of these regressions. Regression A has an R-squaredvalue of .53 and a t-value of 1.08. Regression B has an R-squared of .89 and a t-value of 2.17. Whatdo these statistical measures indicate about the regressions? Which regression should Carter DryCleaning use for cost estimation?
What is the importance of ratio analysis? What are the four main categories? How would a health care manager use ratio analysis?
Take a moment and ponder a current project you are working on at your place of work on a inpatient psychiatric unit. Could you, if requested, determine the costs associated with your project and what the potential savings to the organization could amount to?
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A recent 10-year study conducted by a research team at the Great Falls Medical School was conducted to assess how age, systolic blood pressure, and smoking relate to the risk of strokes. Assume that the following data are from a portion of this study. Risk is interpreted as the probability (times 100) that the patient will have a stroke over the next 10-year period. For the smoking variable, define a dummy variable with 1 indicating a smoker and 0 indicating a nonsmoker. Develop an estimated multiple regression equation that relates risk of a stroke to the person’s age, systolic blood pressure, and whether the person is a smoker. Is smoking a significant factor in the risk of a stroke? Explain. Use a 0.05 level of significance. What is the probability of a stroke over the next 10 years for Art Speen, a 68-year-old smoker who has a systolic blood pressure of 175? What action might the physician recommend for this patient? What other factors could be included in the model as independent variables?
You must use Excel to perform the regression analysis. Provide the answers under the space provided for each question. You must provide the Excel output for the question along with the answers. Round off the values on the output to three-five decimal places if appropriate.Examine the interaction effect between Bedrooms and Square Footage (SqFt) on house price in a multiple regression model. Include an interaction term for Bedroom × SqFt in the regression model alongside the individual terms for Bathrooms and SqFt. 12) Provide the Excel output below here: (2p)13) Analyze the p-value of the interaction term to determine if the interaction significantly contributes to predicting house price. (α = 0.05) (3p)14) Interpret the coefficient of the interaction term to understand how the effect of Bedroom on house price may change depending on the Square Footage of the home. (3p)15) Why does the main effect of Square Footage (SqFt) become insignificant when the interaction term (SqFt × Bedrooms)…

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