SOLUTION: Mr. jones is opposed to national health isurance. He argues that it would be too costly to implement, particularly since the existence of such systems would, among other effects, t

Question 74940: Mr. jones is opposed to national health isurance. He argues that it would be too costly to implement, particularly since the existence of such systems would, among other effects, tend to encourage people to spend more times in hospitals. Mr >jones believes that, length of stays in hospitals is dependent on the types of health isurance that people have. He asked the head of R & D department to check this out – who duly collected data on a random sample of 600 hospitals stays. the data is summarized below :
Days is hospitals

<5 days 5-10 days >10 days
Fraction of costs <25% 40 75 65
covered by insurance 25-50% 30 45 75
>50 % 40 100 190
Prepare a statistical analysis to determine whether Mr. Jones’s concern is supported by empirical evidence. You may use 5 % level of significance

Answer by stanbon(48568) (Show Source):
You can put this solution on YOUR website!
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Mr >jones believes that, length of stays in hospitals is dependent on the types of health isurance that people have. He asked the head of R & D department to check this out – who duly collected data on a random sample of 600 hospitals stays. the data is summarized below :
Days is hospitals
<5 days 5-10 days >10 days
Fraction of costs <25% 40 75 65
covered by insurance 25-50% 30 45 75
>50 % 40 100 190
Prepare a statistical analysis to determine whether Mr. Jones’s concern is supported by empirical evidence. You may use 5 % level of significance
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Ho: rows are independent
Ha: rows are not independent
Ran a Chi-Square test on the 3x3 set of data using a TI calculator.
Chi-Square = 24.32
p value = 0.000069041
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Conclusion:
Since p value is less than alpha Reject Ho.
Length of stay in the hospital seems dependent
on % of insurance.
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Cheers,
Stan H.