Confidence Intervals in Healthcare Administration
Discussion: Confidence Intervals in Healthcare AdministrationHealthcare administration leaders are asked to make evidence-based decisions on a daily basis. Sometimes, these decisions involve high levels of uncertainty, as you have examined previously. Other times, there are data upon which evidence-based analysis might be conducted.This week, you will be asked to think of scenarios where building and interpreting confidence intervals (CIs) would be useful for healthcare administration leaders to conduct a two-sided hypothesis test using fictitious data.For example, Ralph is a healthcare administration leader who is interested in evaluating whether the mean patient satisfaction scores for his hospital are significantly different from 87 at the .05 level. He gathers a sample of 100 observations and finds that the sample mean is 83 and the standard deviation is 5. Using a t-distribution, he generates a two-sided confidence interval (CI) of 83 +/- 1.984217 *5/sqrt(100). The 95% CI is then (82.007, 83.992). If repeated intervals were conducted identically, 95% should contain the population mean. The two-sided hypothesis test can be formulated and tested just with this interval. Ho: Mu = 87, Ha: Mu87. Alpha = .05. If he assumes normality and that population standard deviation is unknown, he selects the t-distribution. After constructing a 95% CI, he notes that 87 is not in the interval, so he can reject the null hypothesis that the mean satisfaction rates are 87. In fact, he has an evidence-based analysis to suggest that the mean satisfaction rates are not equal to (less than) 87.For this Discussion, review the resources for this week, and consider how a CI might be used to support hypothesis testing in a healthcare scenario.By Day 3Post a description of a healthcare scenario where a CI might be used, and then complete a fictitious two-sided hypothesis test using a CI and fictitious data.Albright, S. C., & Winston, W. L. (2017). Business analytics: Data analysis and decision making (6th ed.). Stamford, CT: Cengage Learning.Chapter 8, “Confidence Interval Estimation”Chapter 9, “Hypothesis Testing”
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