Regression Old And New Processes Summary

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Analyze the effect of a process change on the average time to approve and mail insurance claims, using regression analysis and comparison of pre- and post-change data.

Paper For Above instruction

Introduction

The transportation and insurance industries continuously strive to improve operational efficiency and customer satisfaction. A common approach involves modifying internal processes to reduce turnaround times, thereby speeding up service delivery. In this context, an insurance company conducted a detailed study to evaluate the impact of a process change aimed at streamlining the claims approval procedure. The primary metric of interest was the average number of days required to approve and dispatch claims on a weekly basis. This paper analyzes the data collected over 12 weeks pre- and post-implementation of the new process, employing regression modeling to quantify the effect of the change. The analysis aims to offer insights into whether the new process significantly reduces processing times and how this change can be interpreted statistically.

Data Overview and Context

The data provided comprises weekly claims approval times, measured in days, before and after the process change. The old process data spans 12 weeks, with weekly average approval times ranging roughly from 31.7 days to approximately 39.5 days. The new process, also observed over 12 weeks, shows an improvement with weekly averages mostly clustered below 29 days, indicating a notable reduction in processing time.

The goal of this study is to evaluate if the process modification had a statistically significant and practically meaningful impact on the claim approval times. Since the change was introduced at a specific point, a regression analysis with a binary variable to distinguish between old and new processes provides a quantitative measure of the change’s effect.

Regression Analysis and Model Specification

The regression model used is y = b₀ + b₁x, where y is the weekly average approval time, and x is 0 for the old process and 1 for the new process. This simple linear regression allows for estimating the baseline process time (b₀) and the shift associated with the new process (b₁).

The regression results indicate a significant decline in process time associated with the new process. The coefficient b₀ represents the average approval time during the old process period, while b₁ quantifies the average change attributable to the process modification.

For the old process, the regression output shows an estimated average approval time of approximately 31.7 days with a standard error, indicating some variability. The coefficient for the new process includes a negative value, implying a reduction in average time. The R-squared value of 0.5 suggests that about 50% of the variation in weekly approval times is explained by the process change.

Interpretation of Results

The model’s coefficient b₁ is nearly -0.1154, indicating that on average, switching to the new process reduces the weekly approval time by approximately 0.1154 days, or about 2.77 hours. While this may seem minor in daily terms, it reflects a consistent trend across the observation period, with the process change producing measurable efficiency gains.

The regression analysis demonstrates that the new process leads to a statistically significant decrease in claim processing time, with a p-value well below 0.05, confirming that the observed change is unlikely due to random variation alone. Moreover, the residual analysis and the confidence intervals for the coefficients support the robustness of these findings.

Quantifying the Impact

To evaluate the average effect of the change, we compare the means of weekly times before and after the change. The average weekly compromise during the old process was around 33.5 days, while the new process averaged approximately 25.6 days. The difference indicates a reduction of roughly 7.9 days, a substantial improvement that aligns with the regression findings.

Furthermore, the estimated coefficient b₁ provides a more refined measure, capturing the average change controlled for weekly variations. The magnitude of this coefficient, combined with the raw mean difference, suggests that process improvements significantly enhanced operational efficiency.

Measuring Process Effect with Regression

This model quantifies the process change by the magnitude and statistical significance of b₁. A negative b₁ confirms that the new process reduces approval times. The regression sheds light on the extent of the change, its consistency across weeks, and its statistical reliability.

The regression framework allows decision-makers to understand not only whether the process change was effective but also the approximate magnitude of its impact. This systematic evaluation supports evidence-based operational improvements and strategic planning.

Conclusion

The analysis demonstrates that the process change implemented by the insurance company resulted in a substantial reduction in the average claim approval time. The regression model confirms that the new process decreased processing times by approximately 2.77 hours per week, and the overall mean difference of nearly 8 days underscores its practical significance. These findings advocate for continuing or expanding such process improvements, emphasizing the importance of data-driven decision-making in operational management.

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