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Supporting Modalities
Building a regression model to understand the primary goal
The goal of the exercise is also to build a model which is robust (includes all
important variables) but at the same time is parsimonious.
The exercise is about including variables on the basis of the business
question and context to find the most optimal method of addressing the
challenge
Available variables
Services offered - Dummy variables
1
High-tech services, High-touch services, Residency program
Limitations to data
Missing some relevant variables like nurse quality or hours of physicians
Controls
It controls for the following x-variables to avoid OVB on nsr effect
1 Case weight: Controls for hospital population's sickness
2 High-touch: Amount of high-touch services in the hospital; controls for
services high in staff and with low mortality rates (incremental with the
amount of services)
3 Percentage Medicare: Controls for elder people who tend to require
more nurses with higher mortality rates
4 Median income: Controls for factors like access to better medicine in
higher income hospitals that interfere with nsr effect in mortality rates
5 Unemployment rate: Controls for inequity factors in the distribution of
income
Profitability analysis
We have strong evidence with 3.9% significance level that hiring additional
nurses will be a profitable measure
Ha: Benefits of reduced mortality > Costs of 10 additional nurses
p-value: 3.9%
-1.27
-2.01
-6.1 -6.89
-10.92
-11.73
The closely matching values of the coefficient indicate that the model is robust
when different variables are used to describe the effect on mortality
Available variables
1 Services offered 2 Demographics 3 Hospital KPIs
Dummy variables Population in ZIP code surrounding Specific hospital measurements
hospital
High-tech services Gender Mortality rate
Burn care, cardiac % of female population Percent of admitted patients
catheterization, coronary care, Race who die in hospital
CT scan, heart surgeries, % of black,% hispanic Nurse rate
lithotripsy, others
Education Nurse staffing ratio
% with no more than high Case weight
High-touch services school degree, % with graduate Measure of hospital
Alcohol rehabilitation, alternate degree population's sickness
birthing, home health care, drug
rehabilitation, others
Income & employment Other
Median income, % Average length of stay (los),
unemployment Number of inpatients referred
Residency program
Age in, Number of beds staffed,
% age 5 or under, % Medicare Number of surgeries performed,
if hospital was opened in 1988
Population
Limitations to data
Missing some relevant variables like nurse quality or hours of physicians