Decision_of_Uncertainty_Paper

Decision of Uncertainty Paper Olga Belteton QNT/561 December 17, 2012 Instructor: Richard La Valley Decision of Uncertainty Paper The Senior Living Company provides services to the elderly specializing in caring for those with dementia. Some of the patients are wealthy and cost is not an issue while others need assistance. With the current changes in medical coverage today there may be a need to increase the fees or eliminate services that are unnecessary in order to accommodate all patients. Raising fees for those patients where income is not an issue is not a problem. It is raising the fees to those that already struggle and may opt to leave the facility for something more affordable. The facility offers many services that other facilities currently do not and this is what draws the clientele. The idea is to research the services to see if they are being utilized by all patients, some patients or very few patients. By establishing a foundation of what the company needs to consider the process of picking a sample follows. Research needed to be conducted to evaluate risk in increasing the fees of patients where income could be an issue. This was done by taking a random sample of 50 patients across the facilities. They were surveyed about the how much of an increase they would accept before looking for a different facility. They were also asked questions about the various services offered at the facilities and which ones they use, how often or not at all. They were also asked other questions to gain insight on other parts of the facility so that the company could also evaluate the other departments. This included staff, nutrition, maintenance, security and the patients overall perception of what was being provided for them to live in the facility. The following information regarding fees was gathered: Current Fees: range from 108.85 to 296.28 per day (attached detailed data sheet) The company figures that the dollar amounts follow a normal distribution and now that the data is collected they can concentrate on accurately interpreting the data to make a decision that will work for both the company and the patients. With the 50 patients also giving input on various other departments it give the company the opportunity to see if the money they have spent to meet the goals they have set at each facility is truly where it needs to be or does it need to be more or less. By analyzing the responses to the various services the company can determine which services are valuable, which ones need to be revamped and which ones need to be eliminated. By adding a “what would you like to see changed, added or gone” question it also gives the company and idea of what patients would like to see happen. This gives the company the ability to broaden the scope of what changes need to be. It could be a simple as eliminating the hair dresser and replacing it with movie nigh or could be a complicated as replacing the night shift with a new set because there are too many complaints. Also, all the data collected does not have to be changed, eliminated overnight. The company has options and a smart company will take the information ponder and decide which decisions will be beneficial to meeting the companies goals and go with those first. A number of analyzing tools can be used to give the probability of different outcomes. Some of these are Bayes’ theorem, conditional probability rules, confidence intervals and hypothesis testing to name a few. In statistical models depending on the situation will determine the analytical tool that is needed. The company had three scenarios they wanted to consider in order to make the appropriate decision. The following are the proposed increase rates the company was looking into. Potential rate increase: At two percent range increase would be from $2.18 to $5.93 per day At three percent range increase would be from $3.27 to $8.89 per day At five percent range increase would be from $5.44 to $14.81 per day Based on the information gathered the company is able to see what the outcomes will be for the proposed increases. This information along with the patients surveys gathered should help them determine what the best solution will be long term. In the end a happy patient means a long term patient which means the company is meeting it’s goals. Sample of 50 patient fees and their proposed increases |Current fees |potential increase | | | | | | |2% | |3% | |5% | | |108.85 |111.03 |2.18 |112.12 |3.27 |114.29 |5.44 | |163.29 |166.56 |3.27 |168.19 |4.90 |171.45 |8.16 | |163.29 |166.56 |3.27 |168.19 |4.90 |171.45 |8.16 | |166.00 |169.32 |3.32 |170.98 |4.98 |174.30 |8.30 | |166.00 |169.32 |3.32 |170.98 |4.98 |174.30 |8.30 | |166.38 |169.71 |3.33 |171.37 |4.99 |174.70 |8.32 | |166.38 |169.71 |3.33 |171.37 |4.99 |174.70 |8.32 | |171.45 |174.88 |3.43 |176.59 |5.14 |180.02 |8.57 | |177.00 |180.54 |3.54 |182.31 |5.31 |185.85 |8.85 | |179.00 |182.58 |3.58 |184.37 |5.37 |187.95 |8.95 | |180.00 |183.60 |3.60 |185.40 |5.40 |189.00 |9.00 | |182.49 |186.14 |3.65 |187.96 |5.47 |191.61 |9.12 | |183.00 |186.66 |3.66 |188.49 |5.49 |192.15 |9.15 | |183.00 |186.66 |3.66 |188.49 |5.49 |192.15 |9.15 | |183.00 |186.66 |3.66 |188.49 |5.49 |192.15 |9.15 | |183.78 |187.46 |3.68 |189.29 |5.51 |192.97 |9.19 | |184.00 |187.68 |3.68 |189.52 |5.52 |193.20 |9.20 | |184.00 |187.68 |3.68 |189.52 |5.52 |193.20 |9.20 | |184.00 |187.68 |3.68 |189.52 |5.52 |193.20 |9.20 | |184.00 |187.68 |3.68 |189.52 |5.52 |193.20 |9.20 | |184.10 |187.78 |3.68 |189.62 |5.52 |193.31 |9.21 | |189.00 |192.78 |3.78 |194.67 |5.67 |198.45 |9.45 | |189.00 |192.78 |3.78 |194.67 |5.67 |198.45 |9.45 | |189.00 |192.78 |3.78 |194.67 |5.67 |198.45 |9.45 | |189.00 |192.78 |3.78 |194.67 |5.67 |198.45 |9.45 | |189.00 |192.78 |3.78 |194.67 |5.67 |198.45 |9.45 | |190.00 |193.80 |3.80 |195.70 |5.70 |199.50 |9.50 | |192.00 |195.84 |3.84 |197.76 |5.76 |201.60 |9.60 | |193.00 |196.86 |3.86 |198.79 |5.79 |202.65 |9.65 | |195.00 |198.90 |3.90 |200.85 |5.85 |204.75 |9.75 | |200.00 |204.00 |4.00 |206.00 |6.00 |210.00 |10.00 | |200.00 |204.00 |4.00 |206.00 |6.00 |210.00 |10.00 | |200.00 |204.00 |4.00 |206.00 |6.00 |210.00 |10.00 | |200.00 |204.00 |4.00 |206.00 |6.00 |210.00 |10.00 | |200.00 |204.00 |4.00 |206.00 |6.00 |210.00 |10.00 | |200.00 |204.00 |4.00 |206.00 |6.00 |210.00 |10.00 | |210.00 |214.20 |4.20 |216.30 |6.30 |220.50 |10.50 | |217.00 |221.34 |4.34 |223.51 |6.51 |227.85 |10.85 | |217.00 |221.34 |4.34 |223.51 |6.51 |227.85 |10.85 | |217.00 |221.34 |4.34 |223.51 |6.51 |227.85 |10.85 | |252.00 |257.04 |5.04 |259.56 |7.56 |264.60 |12.60 | |255.35 |260.46 |5.11 |263.01 |7.66 |268.12 |12.77 | |261.00 |266.22 |5.22 |268.83 |7.83 |274.05 |13.05 | |263.00 |268.26 |5.26 |270.89 |7.89 |276.15 |13.15 | |263.00 |268.26 |5.26 |270.89 |7.89 |276.15 |13.15 | |263.00 |268.26 |5.26 |270.89 |7.89 |276.15 |13.15 | |265.00 |270.30 |5.30 |272.95 |7.95 |278.25 |13.25 | |277.00 |282.54 |5.54 |285.31 |8.31 |290.85 |13.85 | |280.30 |285.91 |5.61 |288.71 |8.41 |294.32 |14.02 | |296.28 |302.21 |5.93 |305.17 |8.89 |311.09 |14.81 |