BackgroundThe equity of public resources triggered by city shrinkage is a global challenge. Significantly, the impact of city shrinkage on the allocation of health service resources needs to be better understood. This study explores the impact of population change on government investment and health service delivery in shrinking cities.Data and methodUsing data from China’s Urban Statistical Yearbook (2010–2020), we employ regression discontinuity (RD) and fixed-effect models to examine the causal relationship between city shrinkage and health service provision.ResultShrinking cities show significant disparities in health resources, particularly in bed numbers (−1,167.58, p < 0.05) and doctor availability (−538.54, p < 0.05). Economic development (p < 0.01) and financial autonomy (p < 0.01) influence hospital bed distribution. Investments in public services (primary schools and teachers, p < 0.01) affect health resource delivery. Robustness tests support our results.ConclusionThis study reveals how city shrinkage disrupts health service provision and equity, establishing a causal relationship between city shrinkage/expansion and health resource allocation, emphasizing the imbalance caused by urban population changes. City expansion intensifies competition for health resources, while shrinking cities struggle to provide adequate resources due to government reluctance. Policymakers should adapt health resource allocation strategies to meet patient demands in changing urban landscapes.