 Conditional exchangeability of hospital risks

Unknown hospital event probabilities can be modelled as exchangeable random variables conditional on shared hyperparameters, for example $P_j\mid m,\kappa \sim \mathrm{Beta}(m\kappa ,(1-m)\kappa )$ independently. Different sample sizes affect the binomial observations but do not by themselves invalidate exchangeability of the risks. Known systematic covariate differences, such as case mix or procedure type, should instead enter the risk model; only residual effects may then be exchangeable. Exchangeability permits heterogeneous realized risks and is not an assertion that all risks are equal.

// Target: biology.bigb