Question

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 treatments. Wellpoint 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 by Wellpoint. 92 35 39 105 84 55 54 48 38 75 46 96 92 72 73 77 92 102 55 83 Assuming 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

Answer 1

Since the population sd is unknown, we will use t-distribution to calculate the confidence interval.

The formula is given by,

CI=

Now, sample mean = = = 1413/20 = 70.65

and sample sd = s = = 22.71

now, df = n-1 = 20-1=19

and t-value at 95% ci with df=19 is 2.09.

Hence, CI= 70.65 (2.09*22.72)/

=70.65 10.62

=(60.03,81.27)

95% confidence interval: $60.03 to $81.27 per visit.