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

Total cost for patient = Constant, plus
aŸÃ—ŸLength of stay ( measured in days ) , plus
b ŸÃ—ŸPresence of one or more complications ( = 1 if true, 0 if false ), plus
cŸÃ—ŸUse of a laparoscope ( = 1 if true, 0 if false )

where a, b, c are coefficients of the regression model. The laparoscope is an instrument somewhat like a miniature telescope with a fiber-optic system that 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:

Required

1. What is the estimated cost for a patient whose surgery has complications and who stays in the hospital

2 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 the model.

Transcribed Image Text:

Length of Stay Complications $1,986 4.89 Laparoscope $908 2.54 Coefficient t-value $861 10.76