Question: Refer to Problem 12.6. The average health care costs per year are $586. The Department of Health and Human Services has funded several Health Maintenance Organizations (HMOs). A sample of their average annual costs per person is as follows:

$591 $451

$546 $494

$437 $561

$527 $523

$602 $481

The hypothesis is that HMOs are an improvement. Are they?

----- The average per capita annual health care cost for a sample of U.S. cities (50,000 - 200,000 population) is $586, with a standard deviation of $116 (n = 378). Cavileer , Oregon (population 175,000), contends that its new outpatient treatment program reduces annual health care costs to $525 per person. Is this a significant improvement?

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