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Confidence Intervals in Healthcare Administration

Name

Unit Code

Professor

Date
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Response to colleague 1

Health care insurance is one of the determinants that affect patient's choices in

health care facilities. As a health care administrator, it is essential to determine the kind of

monthly premium the clients are comfortable with[ CITATION Ann11 \l 1033 ]. My colleague

describes a scenario where forty participants complete a survey to determine the amount of a

monthly premium increase they could withstand before calling it quits and leaving their

present health care insurance.

I agree with my colleague; 47.23 would be the mean of this sample with a standard

deviation of 10.05. However, an additional 34.1% of the population would be moved by one

standard deviation to the left. Indeed, if supposedly distribution is normal, then the

maximized retention levels with an increase in premiums would not essentially transpire at

the mean itself[ CITATION Ran11 \l 1033 ]. My colleague's observations are correct. It would be

impossible to give the exact estimations regarding the profitability of various options

following the absence of information on the current premium rates and the total population

size. However, as my colleague observes, the company would stand to benefit in terms of

minimizing risks and maximizing revenue if there was a premium increase below the

observed mean in this population.

Indeed, it is vital to keep in mind that the interval must be one-sided when

determining the confidence interval for this populace[ CITATION Ken19 \l 1033 ]. Defining the

fraction of persons who would remain with the current insurance plan with a selected

premium increase encompasses the z-score and greater use of the known features of the

standard distribution. Furthermore, we must note that the corresponding z-score is

approximately -1.29, in a one-sided 90% confidence interval. Therefore, the line should
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indeed be drawn to the left with 1.29 standard deviation to retain 90% of the

population[ CITATION Rob12 \l 1033 ].

Response to Colleague 2

Indeed, it is true that medical providers rely on evidence-based medicine to make

essential decisions in their practice daily. Estimating the confidence interval in a population

parameter is one way that medical providers can estimate health outcomes[ CITATION Nat171 \l

1033 ]. The healthcare scenario that my colleague picked where confidence intervals are

applicable is estimating cancer rates in the United States using death rates and cancers. As my

colleague stated, confidence interval resonates with the range of variations in the

approximation of the cancer rates. The amount of changeability in the data is what determines

the width of the confidence interval. My comrade's statement that the causes of variability are

caused by numerous factors, including the onset of cancer and any uncertainties on when it

was discerned and diagnosed, the occurrence of death due to cancer, and when the register

received statistics of the death.

According to my colleague's mould, the sample size was 120 people, with a mean

of 60.5 at a standard deviation of 1.98, which would give us a two-sided confidence interval

of 60.5 give or take -1.98. Following his calculations, we end up with a 95% confidence

interval which is 59.0019 or 60.891. However, though his calculations are plausible, I'm

afraid I have to disagree with him. It is crucial to consider that using overlapping confidence

intervals in determining significant differences between two rates presented in the data

visualization tool is discouraged as the practice falls short in detecting significant differences

more frequently than standard hypothesis tastings[ CITATION Ale15 \l 1033 ].

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References

Anna Dixon, R. R. (2011). Patient Choice: How Patients Choose and How Providers

Respond. King's Fund.

Black, K. (2019). Business Statistics: For Contemporary Decision Making. John Wiley &

Sons.

National Academies of Sciences, E. a. (2017). The Promise of Assistive Technology to

Enhance Activity and Work Participation. National Academies Press.

Newcombe, R. G. (2012). Confidence Intervals for Proportions and Related Measures of

Effect Size. CRC Press.

Reinhart, A. (2015). Statistics Done Wrong: The Woefully Complete Guide. No Starch Press.

Wilcox, R. R. (2011). Introduction to Robust Estimation and Hypothesis Testing. Academic

Press.