Is high-tech care in a middle income country worth it? : evidence from perinatal centers in Russia

How much does a dramatic increase in technology improve healthcare quality in an upper-middle income country? Using rich vital statistics data on infant and maternal health outcomes, this study evaluates the effect of introducing technologically advanced perinatal hospitals in 24 regions of Russia on infant mortality during the period 2009-2013. A 7-year aggregate panel dataset reveals that opening a perinatal center corresponds to infant mortality reduction by 3.8% from the baseline rate, neonatal (0-28 day) mortality by 7% and early neonatal (0-6 day) mortality by 7.3%. We find that the perinatal centers help to save 263 additional infant lives annually, ranging from 3 to 25 lives in regions with different birth rates. We further estimate an annual average cost of 52 mln rb (or 2.6 m 2014 PPP USD) per life saved in an average region, which is much higher than the cost of similar interventions in the US