CR5.14 ● Cost-to-charge ratios (the percentage of the amount billed that represents the actual cost) for 11 Oregon hospitals of similar size were reported separately for inpatient and outpatient services. The data are shown in the following table.

Cost-to-Charge Ratio Hospital Inpatient Outpatient Blue Mountain 80 62 Curry General 76 66 Good Shepherd 75 63 Grande Ronde 62 51 Harney District 100 54 Lake District 100 75 Pioneer 88 65 St. Anthony 64 56 St. Elizabeth 50 45 Tillamook 54 48 Wallowa Memorial 83 71

a. Does there appear to be a strong linear relationship between the cost-to-charge ratio for inpatient and outpatient services? Justify your answer based on the value of the correlation coefficient and examination of a scatterplot of the data.

b. Are any unusual features of the data evident in the scatterplot?

c. Suppose that the observation for Harney District was removed from the data set. Would the correlation coefficient for the new data set be greater than or less than the one computed in Part (a)? Explain.