Healthcare statistics error type I & type II - Assignment Example

Healthcare statistics error type I & type II March 11, Healthcare statistics error type I & type II Budgeting for healthcare resources is an example in which one may try to avoid one error type over the other. The errors would relate to investigating the null hypothesis that forecasted budget is sufficient against the alternative hypothesis that the budget is under quoted. Type I error would be preferred over type II error because type I error would mean that the budget is under quoted and influence supply for additional resources.

Even though surplus supply may lead to financial strain in other activities, the error guarantees healthcare needs and therefore quality of health while the excess resources can be rechanneled to other uses. Type II error would however mean scarcity of resources and while it offers no financial benefit in the scenario, it risks inability to offer care services and therefore threatens quality of health. Type I error would therefore be preferred because of it guarantees healthcare objectives while type II error can hinder realization of care objectives (Grove, Burns, and Gray, 2012).

The affordable care act’s provision for review of applications for insurance premium increases is one of the policies that push insurance companies to avoid one type of error. With a null hypothesis that proposed premium increment is not excessive against an alternative hypothesis that the proposed value is excessive, an insurance company will avoid type II error. This is because type II error can lead to excessive increment of premium and the consequence is legal actions against an insurance company for breach of law (The United States Department of Health & Human Services, 2015; Grove, Burns, and Gray, 2012).

ReferencesThe United States Department of Health & Human Services. (2015). Premiums: Rate review. The United States Department of Health & Human Services. Retrieved from: http://www.hhs.gov/healthcare/insurance/premiums/rate-review.html.Grove, S., Burns, N., and Gray, J. (2012). The practice of nursing research: Appraisal, synthesis, and generation of evidence. Philadelphia, PA: Elsevier Health Sciences.