Abstract
We jointly model amount of expenditure for outpatient visits and number of outpatient visits by considering both dependence and simultaneity by proposing a bivariate structural model that describes both variables, specified in terms of their conditional distributions. For that reason, we assume that the conditional expectation of expenditure for outpatient visits with respect to the number of outpatient visits and also, the number of outpatient visits expectation with respect to the expenditure for outpatient visits is related by taking a linear relationship for these conditional expectations. Furthermore, one of the conditional distributions obtained in our study is used to derive Bayesian premiums which take into account both the number of claims and the size of the correspondent claims. Our proposal is illustrated with a numerical example based on data of health care use taken from Medical Expenditure Panel Survey (MEPS), conducted by the U.S. Agency of Health Research and Quality.
Highlights
The use of bivariate distributions where the marginals are one continuous and the other one discrete are extremely rare in statistics and in applied statistics
One of the conditional distributions obtained in our study is used to calculate Bayesian premiums which take into account both the number of claims and the size of the correspondent claim
The proposed model is empirically evaluated by using data of health care use taken from Medical Expenditure Panel Survey (MEPS), conducted by the U.S Agency of Health Research and Quality
Summary
The use of bivariate distributions where the marginals are one continuous and the other one discrete are extremely rare in statistics and in applied statistics. We jointly model amount of expenditure for outpatient visits and number license The second major contribution of this work is based on the fact that the proposed model enables us to evaluate the effect of covariates on both expenditure and number of visits. The proposed model is empirically evaluated by using data of health care use taken from Medical Expenditure Panel Survey (MEPS), conducted by the U.S Agency of Health Research and Quality This set of data can be downloaded from the web page of Professor E.
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