| We studied the cost implications of putting moderate or severe adult asthma patients, who just had asthma related hospitalization or emergency care, on combined long-term-control drug therapy (inhaled corticosteroids + long-term-control bronchodilators) versus on inhaled corticosteroids alone. The study sample was retrospectively selected from Medi-Cal eligibles between Jan. 1995--Dec. 2000. The final data set included 1,547 patients.; After adjusting the observed variables, we found no difference in one-year total health care costs between the combined therapy and the monotherapy. However, when the unobserved selectivity was also adjusted, the combined therapy was less expensive in both the treated population and the general population. The marginal savings for combined therapy would be {dollar}3150 annually. This result indicates a positive selection process (i.e. the combined therapy was given to patients whose health status could be improved the most by it).; Parametric switching regression models have been criticized for sensitivity to the normality assumption of error terms. Our Monte Carlo simulation results showed that with a strong instrument, the switching regression model was rather robust. This result justifies the use of parametric switching regression model to estimate treatment effects with a strong instrument.; Conditional expectation methods have been widely used for their simplicity, and often without adequate justification. We studied the performance of two representative conditional expectation methods. Our results showed that, a consistent estimate of treatment effect on the treated (TT) could be achieved under conditions less strict than those required to achieve a consistent estimate of average treatment effect (ATE ). When such conditions are not met, the bias of TT estimates from conditional expectation methods is correlated only with the unobserved selectivity between the treatment decision and the outcome of the control program. |
