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MIS770 Foundation Skills in Business Analysis - Deakin University

Assignment - Analysis of Medical Malpractice Claim Data

Learning Outcome 1: Critical thinking: evaluating information using critical and analytical thinking and judgment

Learning Outcome 2: Manipulate and summarise data that accurately represents real world problems

Learning Outcome 3: Interpret and appraise statistical output to assist in real-world decision making

Overview

The purpose of this assignment is to investigate a dataset utilising the knowledge learned in Modules One and Two. This will enable conclusions to be drawn that ultimately assist in decision making.

The assignment requires you to analyse a given dataset, interpret the results, and then draw conclusions such that you are able to reply to specific questions being asked of you in the form of a business report. (These questions are asked in the following memorandum).
The aims of the assignment are to:

• provide you with some examples of the application of data analysis
• test your understanding of the material presented in the relevant topics
• test your ability to analyse data and interpret your results
• test your ability to effectively communicate your results to others
Before attempting the assignment, make sure you have prepared yourself well. At a minimum, please read the relevant sections of the prescribed textbook and review the materials provided in Modules 1 and 2 (i.e. Topics 1 to 7).

Scenario

According to a study published in the US News and World Report the cost of medical malpractice in the United States is $55.6 billion a year, which is 2.4 percent of annual health-care spending. Another 2011 study published in the New England Journal of Medicine revealed that annually, during the period 1991 to 2005, 7.4% of all physicians licensed in the US had a malpractice claim. These staggering numbers not only contribute to the high cost of health care, but the size of successful malpractice claims also contribute to high premiums for medical malpractice insurance.

A report from McKinsey (May 2013) Unleashing the Value of Advanced Analytics in Insurance states: "The proliferation of third-party data sources is reducing insurers' dependence on internal data. Digital "data exhaust" from social media and multimedia, smartphones, computers, and other consumer and industrial devices - used within privacy guidelines and assuring anonymity - has become a rich source for behavioural insights for insurance companies, as it has for virtually all businesses.
Recently, the release of previously unavailable or inaccessible public sector data has greatly expanded potential sources of third-party data. The US and UK governments and the European Union have recently launched "open data" Web sites to make available massive amounts of government statistics, including health, education, worker safety, and energy data, among others. With much better access to third-party data from a wide variety of sources, insurers can pose new questions and better understand many different types of risks."

An insurance company in Australia has collated a range of data and wants to develop a better understanding of its claims paid out for medical malpractice lawsuits. Its records show claim payment amounts, as well as information about the presiding physician and the claimant for a number of adjudicated or settled lawsuits in this year.

The Data

The data set contains numerous variables and details about the claims. For the purpose of this assignment the data set has been simplified to nine variables with information about 200 randomly selected claims made this year.

The questions you need to answer are contained in the following memorandum.

Memorandum

Date: 24th August, 2020
To: Ellyse Perry, Analyst, iFastInsurance
From: Daisy Pearce, Manager, Medical negligence claims Team, iFastInsurance Subject: Analysis of medical malpractice Claim Data

Dear Ellyse,

Can you please carry out an analysis of the medical malpractice Claim data (contained in the file (MedMalLawsCliam Data.xlsx) and prepare a report for me containing answers to the following questions.

My specific questions are:
Q1. An Overall View of both "Amount" and "severity rating of damage" Can you provide me with overall summaries of
a) the amount of the claim payment in dollars?
b) the severity rating of damage to the patient.

Q2. Relationships

a) Is there a difference in ‘MILD', ‘MEDIUM' or ‘SEVERE' claims when comparing males and females?
b) Is there a relationship between the age of the claimant and the amount of the claim payment?
c) The insurance company would like to get an understanding of the relationship between the speciality of the physician involved and claim amount.

I realise that the survey relates to a random sample of 200 claims paid out for medical malpractice lawsuits, and that this information can be used to draw inferences about all claims paid out for medical malpractice lawsuits by iFastInsurance. With that in mind, I hope you are able to provide me with answers to the following questions:

Q3. The insurance company would like to get an estimate of the following.

a) Average age of the claimant in years
b) Proportion of claims made with a severity condition ‘SEVERE'.

Q4. The insurance company would like to compare this year's claims with the industry average.

a) The industry average of amount of payment per claim is 68,000 dollars. Is this the same or different this year?
b) Based on the industry average, less than 51% of the claimants are either divorced or widowed. Is it the same this year?

Q5. Appropriate Sample Size

Finally, the General Manager of the insurance company is concerned that a sample of only 200 claimants seems too small to draw reliable inferences from. I am concerned that increasing the sample to 400 Australians would still be too small to provide accurate results. For a survey we intend to undertake next year, we would like your advice on the following:

a) Should a large sample be collected? Does the precision of an estimate increase when a large sample is being used?
b) What size sample should be taken to accurately estimate the average amount of claims per year to within 4,000 dollars?

I look forward to your responses. Sincerely,
Daisy

Business Report Requirements

• Your report should be no longer than 3 pages and should not include any charts and tables, or appendices in the report. Charts/graphics and tables are only to be placed in the Data Analysis file i.e. the Excel spreadsheet and not reproduced in the report.
• Suggested formatting for the report: single-line spacing; no smaller that 10- point font; page margins approx. 25mm, and good use of white space.
• Your report must have a cover sheet containing your particulars and Unit details.
• The report is to be written as a stand-alone document (assume Daisy will only read your report). Thus, you should not have any references in the report to your data analysis output. Eg. "According to Table 1 in the analysis..."
• Your report must contain an executive summary that explains in plain language the purpose of the report and summarises the main findings. The executive summary should be no more than 700 words long.
• The body of your report must be set out in the same order as in the originating memorandum from Daisy, with each section (question) clearly marked
• Use plain language and succinct explanations. Avoid the use of technical or statistical jargon as Daisy cannot be expected to understand statistical terminology. As a guide to the meaning of "Plain Language", imagine you are explaining your findings to a person without any statistical training (e.g. someone who has not studied this unit). What type of language would you use in this case?

Attachment:- Analysis of Medical Malpractice Claim Data.rar