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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Please explain your answer to the question above, being as specific as possible.
The following information has been gathered onthe costs and effectiveness of the two treatments, Aand B. In this problem, costs and consequences arenot discounted.a. What is the total cost for the survivors receivingtreatment A? For decedents (assuming suddendeath)?b. What is the total cost for survivors receivingtreatment B? For decedents?c. What is the expected cost for those patientsreceiving treatment A? And treatment B?d. Draw a simple decision tree showing the costsand consequences of each treatment option.e. Calculate the incremental cost and incrementalbenefit of the treatment alternatives.f. What is the ICER?
How can CVP Analysis be used to predict future cost and profitability? How can CVP analysis be used in a hospital setting?
A Community health clinic's costs are shown below. What is total average cost per patient? 4,824 Patients Total variable costs $6,375 Total fixed costs ? Variable cost per ? patient Fixed cost per patient $2.40 Total average cost per patient ? Round your answer to two decimal places. Do not round any intermediate calculations.
What was the motivation for changing the way physicians are compensated in the Medicare system? What are the implications for physicians' behavior as the resource-based relative value scale is fully implemented?
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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?
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The Audiology Department at Randall Clinic offers many services to the clinic’s patients. The three most common, along with cost and utilization data, are as follows: Service Variable cost per service Annual Direct fixed Cost Annual number of visits Basic examination $5 $50,000 30,000 Advanced examination 7 30,000 1,500 Therapy section 10 40,000 500 What is the fee schedule for these services, assuming that the goal is to cover only variable and direct fixed costs? Assume that the Audiology Department is allocated $100,000 in total overhead by the clinic, and the department director has allocated $50,000 of this amount to the three services listed above. What is the fee schedule assuming that these overhead costs must be covered? (To answer this question, assume that the allocation of overhead costs to each service is made on the basis of number of visits.) Assume that these services must make a combined profit of $25,000. Now, what is the…
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?
Travel or transportation to the clinic is an example of --_costs O Intangible O Indirect O Direct Medical O Direct Non-Medical

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