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Instruction 11-5
the CEO of a Large Australian Health Fund

question 27

Multiple Choice

Instruction 11-5
The CEO of a large Australian health fund is attempting to show the benefits of managed health care to an insurance underwriting company.The CEO believes that certain types of doctors are more cost-effective than others.One theory states that Primary Specialty is an important factor in measuring the cost-effectiveness of physicians.To investigate this,the CEO obtained independent random samples of 20 physicians from each of four primary specialties - General Practice (GP) ,Internal Medicine (IM) ,Paediatrics (PED) ,and Family Physicians (FP) - and recorded the total charges per member per month for each.A second factor which the CEO believes influences total charges per member per month is whether the doctor is a foreign or Australian medical school graduate.The CEO theorises that foreign graduates will have higher mean charges than Australian graduates.To investigate this,the CEO also collected data on 20 foreign medical school graduates in each of the four primary specialty types described above.So information on charges for 40 doctors (20 foreign and 20 Australian medical school graduates) was obtained for each of the four specialties.The results for the ANOVA are summarised in the following table.
 Source  df  SS  MS  F  PR > F  Specialty 322,8557,61860.940.0001 Med school 11051050.840.6744 Interaction 38902972.380.1348 Error 15218,950 Total 15942,800\begin{array} { l r r r r r } \hline \text { Source } & \text { df } & \text { SS } & \text { MS } & \text { F } & \text { PR } > \text { F } \\\hline \text { Specialty } & 3 & 22,855 & 7,618 & 60.94 & 0.0001 \\\text { Med school } & 1 & 105 & 105 & 0.84 & 0.6744 \\\text { Interaction } & 3 & 890 & 297 & 2.38 & 0.1348 \\\text { Error } & 152 & 18,950 & & & \\\text { Total } & 159 & 42,800 & & & \\\hline\end{array}
-Referring to Instruction 11-5,interpret the test for interaction.


Definitions:

Individualistic Culture

A culture that emphasizes personal independence and the value of individual self-expression over collective goals.

Collectivistic Culture

A societal framework where individuals prioritize the needs and goals of the group over their own personal needs and desires.

Personal Goals

Individual objectives and ambitions that a person aims to achieve, which can be short-term or long-term.

Social Obligations

The responsibilities or duties one has to other individuals or groups in society.

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