Does Retirement Impact Health Care Utilization?

The objective of this paper is to estimate the causal effect of retirement on health care utilization. To do so, we use data from the 1992-2008 waves of the Health and Retirement Study (HRS) and the 2004-2006 waves of the Survey of Health, Aging, and Retirement in Europe (SHARE). In particular, we estimate the causal impact of retirement on health care utilization as measured by: doctor visits, visits to a general practitioner, nights in the hospital, and preventative care use. This paper uses panel data and instrumental variable methods, exploiting variation in statutory retirement ages across countries, to estimate the causal effects. Cross-country comparisons allow us to examine the role of a health care system’s use of the general practitioner as a gate keeper to specialists in this relationship. We find that while retirement is associated with increased health care use, our causal estimates show that retirement leads to fewer doctor visits in both the US and continental Europe. Nights in the hospital are unaffected by retirement status. Further we find that health care systems with primary care physicians who act as gatekeepers are particularly effective at decreasing doctor visits at retirement. Therefore, we conclude that increasing the statutory retirement age to help the solvency of the retirement systems will also increase doctor visits as individuals continue to work longer. In the US, the burden of this increased utilization will likely be borne by private insurance companies and public insurance to the extent it covers working individuals in their 60’s. European evidence suggests that this increase in doctor visits due to delayed retirement will be particularly evident in health systems without strong gatekeeper roles for general practitioners.