Observational studies are by default considered low level of evidence. However, the level of evidence can be upgraded for a number of reasons. an important general remark on this issue: only studies with no threats to validity (not downgraded for any reason) can be upgraded. RCT evidence can in principle be upgraded, but GRADE considers this as rare and exceptional.
When methodologically strong observational studies yield large or very large and consistent estimates of the magnitude of a treatment or exposure effect, we may be confident about the results. In these situations, the weak study design is unlikely to explain all of the apparent benefit or harm, even though observational studies are likely to provide an overestimate of the true effect.
The larger the magnitude of effect, the stronger becomes the evidence. As a rule of thumb, the following criteria were proposed by GRADE:
On occasion, all plausible confounding from observational studies or randomized trials may be working to reduce the demonstrated effect or increase the effect if no effect was observed.
For example, if only sicker patients receive an experimental intervention or exposure, yet they still fare better, it is likely that the actual intervention or exposure effect in less sick patients is larger than the data suggest.
The presence of a dose-response gradient may increase our confidence in the findings of observational studies and thereby increase the quality of evidence.