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Question 1 (25 credits):
The attached dataset, provides some information about hospitals in 2011 and 2012, download the data and then complete the descriptive table. Please use the following questions.
 In term of hospital characters what are the significant difference between 2011 and 2012?
 In term of socioeconomic variables what are the significant difference between 2011 and 2012?
 Based on your findings in which years hospitals had better performance? How hospital performance related to hospital characteristics and socioeconomic characteristics? Please write at least three main different movements between 2011 and 2012.
To report the “Per Capita Hospital Beds to Population”, you need to divide “total_hospital_beds/ tot_population)
Table 1. Descriptive statistics between hospitals in 2011 & 2012
2011 
2012 
pvalue 

N 
Mean 
St. Dev 
N 
Mean 
St. Dev 

Hospital Characteristics 

1. Hospital beds 

2. Number of paid Employee 

3. Number of nonpaid Employee 

4. Internes and Residents 

5. System Membership 

6. Total hospital cost 

7. Total hospital revenues 

8. Hospital net benefit 

9. Available Medicare days 

10. Available Medicaid days 

11. Total Hospital Discharge 

12. Medicare discharge 

13. Medicaid discharge 

SociEconomic Variables 

14. Per Capita Hospital Beds to Population 

15. Percent of population under poverty 

16. Percent of Female population under poverty 

17.Percent of Male population under poverty 

18. Median Household Income 
(Note: You can use week 1 exercise’s codes to answer this question, but you need to modify that for this analysis)
Question 2 (25 credits):
Use the dataset from week1 exercise and then answer the following questions:
 Compare the following information between forprofit and nonforprofit hospitals.
 What are the main significant differences between forprofit and nonforprofit hospitals? Which test is the best fit test? Why?
 Use a boxplot and compare Hospital net benefit between forprofit and nonforprofit hospitals.
 Show another scatter plot and compare hospital cost (xaxes) and revenue (yaxes) and discuss your findings?
 Comparing hospital netbenefit which hospitals has better performance? To answer this question first compute the hospital net benefits with subtracting hospital costs and revenues and then use ttest to compare the significant differences between teaching and nonteaching hospitals.
 Overall, what are the main significant differences between forprofit and nonforprofit hospitals?
Table 2. Descriptive statistics between teaching and nonteaching hospitals, 2011 & 2012
For Profit 
NonForProfit 
pvalue 

N 
Mean 
St. Dev 
N 
Mean 
St. Dev 

Hospital Characteristics 

1. Hospital beds 

2. Number of paid Employee 

3. Number of nonpaid Employee 

4. Internes and Residents 

5. System Membership 

6. Total hospital cost 

7. Total hospital revenues 

8. Hospital net benefit 

9. Available Medicare days 

10. Available Medicaid days 

11. Total Hospital Discharge 

12. Medicare discharge 

13. Medicaid discharge 

SociEconomic Variables 

14. Per Capita Hospital Beds to Population 

15. Percent of population under poverty 

16. Percent of Female population under poverty 

17.Percent of Male population under poverty 

18. Median Household Income 
(Note: You can use week 2 exercise’s codes for this analysis, you need to modify that for this analysis).
Question 3 (25 credits):
The dataset provides Herfindahl–Hirschman Index for health insurance market, please use the herf_ins variable and answer the following questions:
For this exercise you do not need to compute the HHI, but if you have any questions, please do not hesitate to ask me, but try to learn more about this you will need that to report your findings.
Please remember for the class exercise you used the herf_cat as a hospital herfindahl index for this question make sure to use herf_ins as herfindahl index for insurance market.
Use the dataset from week1 exercise and then answer the following questions:
 In a short paragraph explain the herfindahl index you can use the reference provided in the class exercise or any other citation.
 Compare the following information between hospitals located in high, moderate and low competitive health insurance markets?
 What are the main significant differences between hospitals in different markets? (use Anova test)
 What is the impact of being in highcompetitive health insurance market on hospital revenues and cost?
 Do you think being in highcompetitive market has positive impact on net hospital benefits?
 What about the number of Medicare and Medicaid discharge? Do you think hospitals in higher completive market more likely to accept more Medicare and Medicaid patients?
 What are the impact of other variables?
 Run a regression model use the benefit as a dependent variable and hospital beds, herf_index, Medicare and Medicaid discharges, system membership, and number of interns and residents as independent variables and discuss your findings.
(Note: to answer to the last question, please compute the ratioMedicaredischarge and ratioMedicaiddischarge first and then run 2 ttest) high vs. moderate and high vs. low competitive market), please support your findings with boxplot).
Table 3. Comparing hospital characteristics and market, 2011 and 2012
High Competitive Market 
Moderate Competitive Market 
Low Competitive Market 
ANOVA/ChiSq (results) 

Hospital Characteristics 
N 
Mean 
STD 
N 
Mean 
STD 
N 
Mean 
STD 

1. Hospital beds 

2. Number of paid Employee 

3. Number of nonpaid Employee 

4. Internes and Residents 

5. System Membership 

6. Total hospital cost 

7. Total hospital revenues 

8. Hospital net benefit 

9. Available Medicare days 

10. Available Medicaid days 

11. Total Hospital Discharge 

12. Medicare dischargeratio 

13. Medicaid dischargeratio 

SociEconomic Variables 

14. Per Capita Hospital Beds to Population 

15. Median Household Income 
(Note: You can use week 3 exercise’s codes for this analysis, you need to modify that for this analysis).
Question 4 (25 credits):
You need to explore the impact of hospital characteristics on hospital wage, so please follow these steps to make your dataset ready for the analysis. You need to compute the Medicaredischargeratio and Medicaiddischargeratio, if you answered to questions 3 you already generated these variables.
When you have your data ready, please answer the following questions:
Table 4. Comparing hospital characteristics and market, 2011 and 2012
2011 & 2012 

Hospital Characteristics 
N 
Mean 
St. Dev 
Hospital beds 

System Membership 

Teaching Status 

Nonforprofit 

Total hospital cost 

SocioEconomic Characteristics 

Medicare discharge ratio 

Medicaid discharge ratio 

Being in the Rural areas 

Per Capita Hospital Beds to Population 

Median Household Income 
(Note: Master RStudio script is available for this exercise, but you need to modify that for this analysis)
Question 5. Regression
1st Model:
Run a linear model and predict the difference between hospital beds (use the bedtot) and nonforprofit on hospital’s wage? Discuss your finding, do you think having higher beds has positive impact on the hospital wage? What about the nonforprofit?
2nd Model:
Now, estimate the impact of being a member of a system and teaching hospitals and hospital cost on hospital’s wage? And discuss your finding (nor more than 2 lines)? Is it significant?
3nd Model:
Now, include the ratio of ratioMedicaredischarge and ratioMedicaiddischarge in your model? How do you evaluate the impact of having higher Medicare and Medicaid patients on hospital revenues?
4th Model:
For the last model add hospital bedpercapita, being in a rural areas and household income and discuss your findings?
Based on your finding please recommend 3 policies to improve hospital performance, please make sure to use the final model for your recommendation.
Please also add at least two policy recommendations for the community for example how do you treat household with lower income? And people who are in areas with lower hospital beds?
As the final suggestion what is the impact of being in rural areas on hospital wage?

Model 1 
Model 2 
Model 3 
Model 4 

Hospital Characteristics 
Coeff. 
St. Err 
Coeff. 
St. Err 
Coeff. 
St. Err 
Coeff. 
St. Err 
Hospital beds 

Nonforprofit 

System Membership 

Teaching Status 

Total hospital cost 

SocioEconomic Characteristics 

Medicare discharge ratio 

Medicaid discharge ratio 

Being in the Rural areas 

Per Capita Hospital Beds to Population 

Median Household Income 

N 

RSquared 
(Note: You can use week 5 exercise’s codes for this analysis, you need to modify that for this analysis).
Please use this file to answer the questions and submit to the exercise submission folder.
Notes:
you can use excel
Useful formula and guideline.
The computation of the pvalue is illustrated in following figures. 