Recent research into the cost of various medical procedures has shown the impact of certain complications encountered in surgery on the total cost of patient’s stay in the hospital. The researchers used regression analysis and found the following results:

Total cost for patient = Constant, plus

a x length of stay (measured in days), plus

b x presence of one or more complications (= 1 if true, 0 if false), plus

c x use of a laparoscope (= 1 if true, 0 if false)

Where:

• a, b, c are coefficients of the regression model, and

• The laparoscope is an instrument somewhat like a miniature telescope with a fiber optic system which brings light into the abdomen. It is about as big around as a fountain pen and twice as long.

The research, based on 57 patients, showed the following regression results:

R-squared: 53%

constant term: $3,719

Coefficients and t - values for independent variables:

R Squared	53%
Constant	$ 3,719
Coefficients:
Length of Stay	$ 861
Complications	$ 1,986
Laproscope	$ 908

Required
1. What is the estimated cost for a patient who has complications and stays in the hospital two days, and whose surgery requires a laparoscope?
2. Which, if any, dummy variables are used in this regression?
3. Comment on the statistical measures for themodel.

Transcribed Image Text:

Interpreting Regression Results Recent research into the cost of various medical procedures has shown the impact of certain complications encountered in surgery on the total cost of patient's stay in the hospital. The researchers used regressi on analysis and found the following results: Total Cost for Pati ent-Constant, plus a x length of stay (measured in days), plus b x presence of one or more complications (1 iftrue, 0 If false), plus c x use ofa laparoscope (1 iftre, 0 if false) Where: .a, b, c are coefficients of the regression model, and The laparoscope is an instrument somewhat like a miniature telescope with a fiber optic system which brings light into the abdomen. It is about as big around as a fountain pen and twice as long The research, based on 57 patients, showed the following regression results: 7-squared: 53% constant term: $3,719 Coefficients and t-values for independent variables: Length of Stay $861 10.76 Complication $1,986 4.89 Laproscope $908 2.54 Coefficient t-value Required 1. What is the estimated cost for a patient who has complications and stays in the hospital two days, and whose surgery requires alaparoscope? 2. Which, if any, dummy variables are used in this regression? 3. Comment on the statisti cal measures for the model