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Event studies are frequently used to estimate average treatment effects on the treated (ATT). In estimating the ATT, researchers commonly use fixed effects models that implicitly assume constant treatment effects across cohorts. We show that this is not an innocuous assumption. In fixed effect models where the sole regressor is treatment status, the OLS coefficient is a non-convex average of the heterogeneous cohort-specific ATTs. When regressors containing lags and leads of treatment are added, the OLS coefficient corresponding to a given lead or lag picks up spurious terms consisting of treatment effects from other periods. Therefore, estimates from these commonly used models are not causally interpretable. We propose alternative estimators that identify certain convex averages of the cohortspecific ATTs, hence allowing for causal interpretation even under heterogeneous treatment effects. To illustrate the empirical content of our results, we show that the fixed effects estimators and our proposed estimators differ substantially in an application to the economic consequences of hospitalization.

There is widespread concern over the health risks and healthcare costs from potentially inappropriate high-cost imaging. As a result, the Centers for Medicare and Medicaid Services (CMS) will soon require high-cost imaging orders to be accompanied by Clinical Decision Support (CDS): software that provides appropriateness information at the time orders are placed via a best practice alert for targeted (i.e. likely inappropriate) imaging orders, although the impacts of CDS in this context are unclear. In this randomized trial of 3,511 healthcare providers at Aurora Health Care, we study the impacts of CDS on the ordering behavior of providers. We find that CDS reduced targeted imaging orders by a statistically significant 6%, however there was no statistically significant change in the total number of high-cost scans or of low-cost scans. The results suggest that the impending CMS mandate requiring healthcare systems to adopt CDS may modestly increase the appropriateness of high-cost imaging.

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