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10. Exercises 7. Nurse hotline effectiveness. A health insurer wants to know if having a nurse available to answer simple questions over a telephone hotline
10. Exercises 7. Nurse hotline effectiveness. A health insurer wants to know if having a nurse available to answer simple questions over a telephone hotline could cut the costs of unnecessary doctor visits. Records show the average cost per family is typically around $900 with an SD of $1,000 and the cost distribution is skewed with a tail to the right. They decide to conduct an experiment in which they randomly select 2,500 families, give them access to the hotline and record their health-care costs. After doing this, in the sample of families with hotline access they observe that the average cost per family is $850. Is there evidence here that the hotline actually reduces costs? (a) Justify your answer with a test of statistical significance. (b) Compute and give a brief interpretation of the corresponding p-value in this setting. (c) Should the fact that the cost distributions were skewed affect the calculations you made in Part (b)? Explain briefly
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