Case Study 1

Virtually all countries have universal government health run health care systems. The United States is one notable exception. This is an issue in every election, with some politicians pushing for the United States to adopt a program similar to Canada’s.

In Canada, hospitals are financed and administrated by provincial governments. Physicians are paid by the government for each service. As a result, Canadians pay nothing for these services. The revenues that support the system are derived through income tax, corporate taxes, and sales taxes. Despite higher taxes in Canada than those in the United States, the system is chronically underfunded, resulting in long waiting times for sometimes critical procedures. For example, in some provinces newly diagnosed cancer victims must wait several weeks before treatments can begin. Virtually everyone agrees that more money is needed. No one can agree, however, on how much is needed. Unfortunately, the problem is going to worsen. Canada, like the United States, has an aging population due to the large numbers constituting the ‘baby boom,’ and because medical costs generally are higher for older people.

One of the first steps in addressing the problem is to forecast medical costs, particularly for the 20-year period starting when the first baby boomers reach 60 years of age (in the year 2006). A statistics practitioner has been given the task of making these predications. Accordingly, random samples of four groups of Canadians were drawn:

The medical expenses for the previous 12 months were recorded and stored in columns 1 to 4, respectively. The numbers of Canadians (in thousands) in each age category in 2003 and projections for 2006, 2011, 2016, 2021, and 2026 are listed in the table below.

For each year listed, determine 95% confidence interval estimates of the total medical costs for Canadians 45 years old and older.

Price: $6.44

Solution: The downloadable solution consists of 3 pages, 344 words.
Deliverable: Word Document