A state health web site provides information on the cost-to-charge ratio (the pe

Question

A state health web site provides information on the cost-to-charge ratio (the percentage of billed charges that are actual costs to the hospital). The cost-to-charge ratios for both inpatient and outpatient care in 2002 for a sample of six hospitals of that state follow. (Use a statistical computer package to calculate the P-value. Use mu_inpatient - mu_outpatient. Round your test statistic to two decimal places and your P-value to three decimal places.) Is there sufficient evidence to suggest that the mean difference cost-to-charge ratio for the state's hospitals is lower for outpatient care than for inpatient care? Use a significance level of 0.05. Yes No You may need to use the appropriate table in Appendix A to answer this question.

Explanation / Answer

The statistical software output for this problem is:

Paired T hypothesis test:
D = 1 - 2 : Mean of the difference between Inpatient and Outpatient
H0 : D = 0
HA : D > 0
Hypothesis test results:

Hence,

t = 3.46

df = 5

P Value = 0.009

Difference Mean Std. Err. DF T-Stat P-value Inpatient - Outpatient 25.833333 7.4628711 5 3.4615811 0.009

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