Bryant/Smith Case 42: Hopsital Charges
GM 533
Keller Graduate School of Management
Date: 02/14/2010

EXECUTIVE SUMMARY
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 (Appendix 1). 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 with either insurance. The alternate hypothesis states that patients with managed 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