In 2016 we will hit a milestone: national health spending per capita is projected to exceed $10,000 for the first time. This estimate is from an article by Keehan et al. (2016). In this paper, CMS’ Office of the Actuary (OACT) estimates costs not only this year but over the coming 10 years. According to their projects, […]

Read the rest of this entry »## The Intuition behind Bayes Theorem

Bayes Theorem is well-known in law of probability. Mathematically, you could write it as: P(A|B)=P(A and B)/Pr(B) = P(B|A)*P(A)/P(B). An interesting interview in Scientific American with Decision theorist Eliezer Yudkowsky explains Bayes Theorem more intuitively. I might answer that Bayes’s Theorem is a kind of Second Law of Thermodynamics for cognition. If you obtain a […]

Read the rest of this entry »## Average prevalence of “sickness”

Despite the large number of illnesses defined by the International Statistical Classification of Diseases and Related Health Problems (ICD) disease coding system, health systems need to know how many encounters they are likely to experience each month. One gauge for this is the prevalence of sickness in the population. A paper by White et al. […]

Read the rest of this entry »## Confirmation Bias

HT: Incidental Economist.

Read the rest of this entry »## What are cure fraction models?

Many people are familiar with survival models. Survival models measure the probability of survival to a given time period. The “problem” addressed by these models is that some people are “censored”, in other words, the do not die in the sample time period. Although longer survival is good in practice, for statisticians it is problematic […]

Read the rest of this entry »## How much should you bet?

This is an interesting question to ask. If you are going to the casino, in most cases, the answer is $0. The odds are stacked against you. But what if the odds are in your favor, or you believe that your own predicted probability of winning differs from that of the bet? The easy answer […]

Read the rest of this entry »## Statisitics and the Sports Illustrated Jinx

Daniel Kahneman explains the false inference many people make between causation and regression to the mean. A well-known example is the “Sports Illustrated jinx,” the claim that an athlete whose picture appears on the cover of the magazine is doomed to perform poorly the following season. Overconfidence and the pressure of meeting high expectations are […]

Read the rest of this entry »## Test for equality of categorical varibles

In the standard statistics case, when you compare two continuous variables, you can use a t-test to determine equality of means. For instance, you may want to know if LeBron James scores more points on average than Kevin Durant. However, what if you want to instead compare two categorical variables. For instance, assume you are […]

Read the rest of this entry »## Mahalanobis Distance

What is Mahalanobis distance? Most people know what Euclidean distance is…it is the shortest distance between any two points. In other words, its what we typically think of when we think of distance – the distance we would measure with a ruler, and the one given by the Pythagorean formula. Unlike Euclidean distance, Mahalanobis distance […]

Read the rest of this entry »## How Missing Data affects Physicians’ P4P Bonuses

Pay-for-performance programs often offer bonuses (or penalties) for physicians, hospitals and other providers based on the quality of care patients receive. Measuring quality of care, however, is often difficult. For chronic conditions, for instance, many patients eligible for outcome measures may be lost to follow-up. This issue can potentially affect provider evaluations and bonus payments. […]

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