A Healthcare Executive Is Using Regression to Predict Total Revenues

question 91

Multiple Choice

A healthcare executive is using regression to predict total revenues.She has decided to include both patient length of stay and insurance type in her model.Insurance type can be grouped into the following categories: Medicare,Medicaid,Managed Care,Self-Pay,and Charity.Which of the following is true?

• A)Insurance type will be represented in the regression model by five binary variables.
• B)Insurance type will be represented in the regression model by six dummy variables.
• C)Insurance type will be represented in the regression model by five dummy variables.
• D)Insurance type will be represented in the regression model by four binary variables.
• E)Neither binary nor dummy variables are necessary for the regression model.

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Definitions:

Inflation

The quickness at which the comprehensive level of goods and services' prices rises, corroding purchasing ability.

Real Income

The earning power of a person's money, considering the effects of inflation on purchasing power.

Wages

Payment to resource owners for their labor.

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive or negative.