Hospital competition, service provision and quality : evidence from maternity units

Maternity unit closures are increasingly common in areas with low birth rates, resulting in diminished competition between units. We examine how competition affects the quality and amenities of the remaining maternity units in Germany. To address potential endogeneity in the level of competition, we exploit the unpopularity of maternity unit closures and instrument competition with the tightness of past regional elections. Our findings indicate that while low competition does not significantly affect the quality of care, it leads to reduced availability of additional services potentially used to attract patients in the higher competitive market.