Health insurers are beginning to offer telemedicine services online that replace the common office visit. Wellpoint provides a video service that allows subscribers to connect with a physician online and receive prescribed treatmentsWellpoint claims that users of its LiveHealth Online service saved a significant amount of money on a typical visit. The data shown below (\$), for a sample of 20 online doctor visits, are consistent with the savings per visit reported byWellpoint.9210554759279523583494672908039389674100Assuming the population is roughly symmetric, construct a 95% confidence interval for the mean savings for a televisit to the doctor as opposed to an office visit (to 2 decimals)95% confidence interval: \$to \$per visit

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Step 1

Here, the sample size is 20 that is reasonably small. The population standard deviation is unknown here. Therefore, z-test cannot be used here. In this situation student’s t-distribution can be used.

Let µ be the true mean savings for a visit to the doctor.

Let x bar be the sample mean savings for a visit to the doctor. s be the sample standard deviation. n is the sample size.

The 100(1-α)% confidence interval of µ is,

Step 2

Here the confidence interval is 95%.

Therefore, α = 0.05.

The degrees of freedom, n - 1 = 20 - 1 =19,

From the EXCEL, using the formula, “=T.INV.2T(0.05,19)”, the critical value is 2.093...

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