Below is a table of the expected sources of payment of hospital charges in the U
ID: 3131554 • Letter: B
Question
Below is a table of the expected sources of payment of hospital charges in the US, year 1990. Use the data to answer the questions below.
Source of Payment
Probability
Private Insurance
0.387
Medicare
0.345
Medicaid
0.116
Other Government Program
0.033
Self-payment
0.058
Other/No charge
0.028
Unknown
0.033
Total
1.000
a) What is the probability that Medicare is the principal source of payment for a particular patient's hospital charges?
b) What is the probability the hospital charges for a particular patients are self-paid or paid by private insurance?
c) What is the probability that the hospital charges for a patient are paid by Medicare, given that the cahrges are paid by a government program?
Source of Payment
Probability
Private Insurance
0.387
Medicare
0.345
Medicaid
0.116
Other Government Program
0.033
Self-payment
0.058
Other/No charge
0.028
Unknown
0.033
Total
1.000
Explanation / Answer
a) probability that Medicare is the principal source of payment for a particular patient's hospital charges is 0.345
b) probability the hospital charges for a particular patients are self-paid or paid by private insurance is 0.387 + 0. 058 = 0.445
c) probability that the hospital charges for a patient are paid by Medicare, given that the cahrges are paid by a government program = P(medicare)/P(govt. program) = 0.345/ (0.345+0.116+0.033) = 0.698
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