A Cautionary Tale in Comparative Effectiveness Research: Pitfalls and Perils of Observational Data Analysis

Armando Franco, Dana Goldman, Adam Leive, Daniel McFadden

This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book Measuring and Modeling Health Care Costs, Ana Aizcorbe, Colin Baker, Ernst Berndt, and David Cutler, editors
Conference held October 18-19, 2013
Forthcoming from University of Chicago Press
in NBER Book Series Studies in Income and Wealth

Administrative data such as insurance claims offer a potentially powerful data source to examine the relative benefits and costs of competing drug treatments. Motivated by a 2011 FDA warning about possible side effects of angiotensin-II receptor blockers (ARBs), we analyze the benefits and risks of ARBs compared to other classes of hypertension drugs using Medicare Parts A, B, and D data between 2006 and 2009. We study treatment adherence and crossover as well as non-random treatment assignment in detail and illustrate how different approaches to handling these issues impact our results. We find little evidence that ARBs increase cancer rates and weak evidence that they increase stroke rates, contrary to evidence from randomized controlled trials. Falsification tests raise doubts that any associations are causal. Overall, our results suggest comprehensive, robust analyses are needed in using observational data for comparative effectiveness analysis.

download in pdf format
   (2672 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Users who downloaded this chapter also downloaded* these:
Glazer, McGuire, and Shi Risk Adjustment of Health Plan Payments to Correct Inefficient Plan Choice from Adverse Selection
Lichtenberg The Impact of Biomedical Research on U.S. Cancer Mortality: A Bibliometric Analysis
Rosen, Aizcorbe, Highfill, Chernew, Liebman, Ghosh, and Cutler Attribution of Health Care Costs to Diseases: Does the Method Matter?
Hall and Highfill Calculating Disease-Based Medical Care Expenditure Indexes for Medicare Beneficiaries: A Comparison of Method and Data Choices
Aitken, Berndt, Bosworth, Cockburn, Frank, Kleinrock, and Shapiro The Regulation of Prescription Drug Competition and Market Responses: Patterns in Prices and Sales following Loss of Exclusivity
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us