Discussion:
Q: Your hospital is negotiating with medical insurance providers, who would like to reduce the amount they pay as reimbursement for hospital stays. For a particular procedure, they would like to reduce payment by $300 and have patients go home one day earlier.
To see what effect this would have one hospital costs, a random sample of 50 patients who were recently admitted for this procedure was analyzed. Had they left one day earlier, the average savings would have been $322.44 and the standard deviation was found to be $21.71.
Find the two sided 95% confidence interval for the mean savings, per patient, for the larger population of recent patients.