2. (6 pts) A health insurer estimates the cost of treatment (y) based on the ave

Question

2. (6 pts) A health insurer estimates the cost of treatment (y) based on the average number of      hospitalization days recommended by the examining physician (x). y = 453.96 + 11207.28x a. If an examining physician recommends a hospital stay of 6 days, what        is the estimated treatment cost? b. What is the expected increase in treatment cost for every additional      day of hospitalization? 2. (6 pts) A health insurer estimates the cost of treatment (y) based on the average number of      hospitalization days recommended by the examining physician (x). y = 453.96 + 11207.28x a. If an examining physician recommends a hospital stay of 6 days, what        is the estimated treatment cost? b. What is the expected increase in treatment cost for every additional      day of hospitalization?

Explanation / Answer

Here y is cost of treatment and x is hospitalization days recommended by the examining physician

Regression linevis also given it is y=453.96+11207.28x

a. Now we need to find y when x is 6.

i.e y =453.96+11207.28*6=453.96+67243.68=67697.64

So cost for 6 day stay would be 67697.64

b. Now we need to find cost of every additional day so we will use x =1 in linear equatioon.

i.e. y=453.96+11207.28*1=11661.24

So expected increase in treatment cost for every additional day iof hospitalization is 11661.24

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