Healthcare statistics error type I & type II Assignment

Healthcare statistics error type I & type II - Assignment Example 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). The United States Department of Health & Human Services. (2015). Premiums: Rate review. The United States Department of Health & Human Services. Retrieved from: