Healthcare Staffing Expansion in India
Introduction
Agte and Soni (2025) study the impact of a large-scale reform to India’s public healthcare system that adds a mid-level healthcare worker to village clinics. They utilize a matched difference-in-differences design to assess mortality outcomes and the behavior of patients and providers, taking advantage of quasi-experimental variation in the allocation of new healthcare workers. The paper utilizes administrative health data and two rounds of original survey data, in addition to data on households’ provider choices collected through a healthcare household census in collaboration with a local NGO.
Pays for Itself
Net Cost
For government costs, the paper accounts for government spending on community health officer (CHO) salaries in addition to increased spending on medicines. Their analysis consists of 2,487 treatment group centers, covering 7,752,343 people in total. Each subcenter receives a CHO with a monthly salary of US$480, and the paper assumes that the government spends US$0.24 on medicines per outpatient visit. The paper also reports a treatment effect of 215 additional quarterly patient visits as a result of the intervention.
Combining these estimates, they find total government costs over the 2-year analysis period of US$29,676,874 [2,487 treated subcenters * US$480 * 24 months + 2,487 subcenters
* 215 patients * 8 quarters * US$0.24].
However, these costs are more than offset by a US$45,233,991.12 reduction in government spending on hospitalizations [7,752,343 people * 0.016 percentage point decline in hospitalizations over the past 6 months * US$91.17 government spending per hospitalization visit * 4 semesters].
After accounting for the decline in hospitalizations, the net cost to the government is -US$15,557,117.12.
Willingness to Pay
The paper reports a 0.102 decrease in the number of deaths per quarter as a result of the intervention. Following Cutler (2004), Finkelstein and McKnight (2008), and Finkelstein et al. (2019), the paper uses US$100,000 as the value of a statistical life year. Additionally, the paper assumes that each avoided death leads to an additional year of life on average.
Combining these estimates, the paper finds that total private benefits in the first two years are equal to US$202,939,200 [2,487 treated subcenters * 8 quarters * 0.102 decrease
in deaths per quarter * US$100,000 value of statistical life year].
MVPF Summary
When accounting for the decline in hospitalizations, the MVPF of the intervention is infinite due to negative net government costs. Assuming there is no change in hospitalizations, the MVPF of the intervention is 6.84 [= US$202,939,200 / US$29,676,874].
The paper reports several alternative MVPFs with different assumptions regarding mortality and how long the decline in hospitalizations lasts, ranging from 7.17 to 44.59.
References
Agte, Patrick, Jitendra Kumar Soni (2025). “Fighting Silent Killers: How India’s Public Healthcare Staffing Expansion Saves Lives by Improving Access and Market Quality.” Working Paper. https://patrickagte.github.io/patrickagte/agte_jmp.pdf
Cutler, D. M. (2004). “Your money or your life: Strong medicine for America’s health care system.” Oxford University Press.
Finkelstein, A., R. McKnight (2008). “What did Medicare do? The initial impact of Medicare on mortality and out of pocket medical spending.” Journal of Public Economics, 92(7), 1644–1668. DOI: https://doi.org/10.1016/j.jpubeco.2007.10.005
Finkelstein, A., N. Hendren, E. F. Luttmer (2019). “The Value of Medicaid: Interpreting Results from the Oregon Health Insurance Experiment.” Journal of Political Economy, 127(6), 2836–2874. DOI: https://doi.org/10.1086/702238
Policy Features
- Category
- Social Insurance
- Sub-Category
- Health Adult
- Beneficiary Type(s)
- Adults
- Country of Implementation
- India
- Year of Implementation
- 2022
- Empirical Method
- Difference in Differences
- Research Type
- Primary
- Peer Reviewed
- No
- MVPF Publication Link
- patrickagte.github.io/patrickagte/agte_jmp.pdf