TABLE 11-11 A Physician and President of a Tampa Health Maintenance Organization

question 121

Multiple Choice

TABLE 11-11
A physician and president of a Tampa Health Maintenance Organization (HMO) are attempting to show the benefits of managed health care to an insurance company. The physician believes that certain types of doctors are more cost-effective than others. One theory is that primary specialty is an important factor in measuring the cost-effectiveness of physicians. To investigate this, the president obtained independent random samples of 20 HMO physicians from each of 4 primary specialtiesGeneral Practice (GP) , Internal Medicine (IM) , Pediatrics (PED) , and Family Physicians (FP) and recorded the total charges per member per month for each. A second factor which the president believes influences total charges per member per month is whether the doctor is a foreign or US medical school graduate. The president theorizes that foreign graduates will have higher mean charges than US graduates. To investigate this, the president also collected data on 20 foreign medical school graduates in each of the 4 primary specialty types described above. So information on charges for 40 doctors (20 foreign and 20 US medical school graduates) was obtained for each of the 4 specialties. The results for the ANOVA are summarized in the following table.
-Referring to Table 11-11, interpret the test for interaction.

• A) There is insufficient evidence to say at the 0.10 level of significance that the difference between the mean charges for foreign and US graduates depends on primary specialty.
• B) There is sufficient evidence to say at the 0.10 level of significance that the difference between the mean charges for foreign and US graduates depends on primary specialty.
• C) There is sufficient evidence at the 0.10 level of significance of a difference between the mean charges for foreign and US medical graduates.
• D) There is sufficient evidence to say at the 0.10 level of significance that mean charges depend on both primary specialty and medical school.

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Gain on Sale

The profit realized from the sale of assets other than inventory, calculated as the sale proceeds minus the carrying value of the asset sold.

Debt Investments

Financial assets purchased with the expectation that the investment will generate interest income and be repaid in the future.

Interest Accrual

The recognition of interest earned or payable that has accumulated but not yet been recorded or paid.

Debt Investments

Investments made by purchasing bonds or other debt instruments, with the expectation of earning interest income and the return of principal.