cASE 42 HOSPITAL CHARGES RESEARCH PAPER

Case 42 Hospital Charges Research paper

Case 42 Hospital Charges Research paper

Introduction

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 (Adamache KW and FA, 1983).

Bryant Smith Case 42 Hospital

As described in the case, the hospital's 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 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 (Adamache KW and FA, 1983).

Hospitals feel that physician has a substantial control. Looking at physician performance data to compare hospital charges with the patient's length of stay, type of insurance, and physician involved. A sample 289 patient records were selected who had normal deliveries of babies. From those files, we obtained the number of days the patient spent in the hospital, the total expense charged to that patient, the physician code identification, and the type of insurance the patient carried. The analysis revealed that when we compare patients on managed care and commercial insurance alone, we are 95 % confident that patients with managed care does pay more than patients with commercial insurance. We are 95 % confident that physician 2 is the most expensive physician. The strongest relationship using linear regression is the relationship between hospital charges and the length of stays.

I remember watching a documentary about an insurance company called Health Net and how it got started. It was by a physician who during the early 80's made a lot of money ordering all the possible tests for his patients, from lab tests to scans, etc. Then when managed care came along he got upset with managed care telling what standard ...