Cut off from new competition: Threat of entry and quality of primary care

We study how the threat of entry affects service quantity and quality of general practitioners (GPs). We leverage Germany’s needs-based primary care planning system, in which the likelihood of new GPs reduces by 20 percentage points when primary care coverage exceeds a cut-off. We compile novel data covering all German primary care regions and up to 30,000 GP-level observations from 2014 to 2019. Reduced threat of entry lowers patient satisfaction for incumbent GPs without nearby competitors but not in areas with competitors. We find no effects on working hours or quality measures at the regional level including hospitalizations and mortality. • We disentangle the threat of entry from actual competition for general practitioners. • A unique threshold in Germany’s planning system enables analysis using RDD. • Entry restrictions cut GP entry likelihood by 20 pp, leaving current competition unchanged. • Regional Health Panel: New Data on 1,394 areas and 30k patient ratings for analysis. • Threat of entry lowers monopolist GP quality; competitive GPs remain unaffected. • Broader health outcomes, such as hospitalizations and mortality rates, remain stable despite of these changes.