MIS770: Foundation Skills in Business Analysis - Medical Malpractice Claim Data - Management Assignment Help

ASSIGNMENT TASK:

TASK:

Scenario

According to a study published in the US News and World Report the cost of medical malpractice in the United States is $55.6 billion a year, which is 2.4 percent of annual health-care spending. Another 2011 study published in the New England Journal of Medicine revealed that annually, during the period 1991 to 2005, 7.4% of all physicians licensed in the US had a malpractice claim. These staggering numbers not only contribute to the high cost of health care, but the size of successful malpractice claims also contribute to high premiums for medical malpractice insurance.

A report from McKinsey (May 2013) Unleashing the Value of Advanced Analytics in Insurance states: “The proliferation of third-party data sources is reducing insurers’ dependence on internal data. Digital “data exhaust” from social media and multimedia, smartphones, computers, and other consumer and industrial devices — used within privacy guidelines and assuring anonymity — has become a rich source for behavioural insights for insurance companies, as it has for virtually all businesses.

Recently, the release of previously unavailable or inaccessible public sector data has greatly expanded potential sources of third-party data. The US and UK governments and the European Union have recently launched “open data” Web sites to make available massive amounts of government statistics, including health, education, worker safety, and energy data, among others. With much better access to third-party data from a wide variety of sources, insurers can pose new questions and better understand many different types of risks.”

Q1. An Overall View of both “Amount” and “severity rating of damage” Can you provide me with overall summaries of
 

a) the amount of the claim payment in dollars?
b) the severity rating of damage to the patient.
 

Q2. Relationships
 

a) Is there a difference in ‘MILD’, ‘MEDIUM’ or ‘SEVERE’ claims when comparing males and females?
b) Is there a relationship between the age of the claimant and the amount of the claim payment?
c) The insurance company would like to get an understanding of the relationship between the speciality of the physician involved and claim amount.
I realise that the survey relates to a random sample of 200 claims paid out for medical malpractice lawsuits, and that this information can be used to draw inferences about all claims paid out for medical malpractice lawsuits by iFastInsurance. With that in mind, I hope you are able to provide me with answers to the following questions:
 

Q3. The insurance company would like to get an estimate of the following.
 

a) Average age of the claimant in years
b) Proportion of claims made with a severity condition ‘SEVERE’.
 

Q4. The insurance company would like to compare this year’s claims with the industry average.
 

a) The industry average of amount of payment per claim is 68,000 dollars. Is this the same or different this year?
b) Based on the industry average, less than 51% of the claimants are either divorced or widowed. Is it the same this year?
 

Q5. Appropriate Sample Size Finally, the General Manager of the insurance company is concerned that a sample of only 200 claimants seems too small to draw reliable inferences from. I am concerned that increasing the sample to 400 Australians would still be too small to provide accurate results. For a survey we intend to undertake next year, we would like your advice on the following:

a) Should a large sample be collected? Does the precision of an estimate increase when a large sample is being used?
b) What size sample should be taken to accurately estimate the average amount of claims per year to within 4,000 dollars?

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