One of the reasons health care costs have been rising rapidly in recent years is the increasing cost of malpractice insurance for physicians. Also, fear of being sued causes doctors to run more precautionary tests (possibly unnecessary) just to make sure they are not guilty of missing something (Reader’s Digest, October 2012). These precautionary tests also add to health care costs. Data in the file LawSuit are consistent with findings in the Reader’s Digest article and can be used to estimate the proportion of physicians over the age of 55 who have been sued at least once.

a. Formulate hypotheses that can be used to see if these data can support a finding that more than half of physicians over the age of 55 have been sued at least once.

b. Use Excel or Minitab and the file LawSuit to compute the sample proportion of physicians over the age of 55 who have been sued at least once. What is the p-value for your hypothesis test?

c. At α = .01, what is your conclusion?