Utilization Variation In Military Versus Civilian Care: Evidence From TRICARE

The Defense Health Agency was established five years ago to integrate and centralize the provision of health care that had been managed separately by the Army, Navy, and Air Force. One favored proposal is to increase the use of private-sector or civilian health care providers. This study compared geographic variation in health care use (a common proxy for efficiency) between patients with a military (direct care) system and those with a civilian (purchased care) system primary care provider-both of which are offered in TRICARE Prime, a health plan that resembles a health maintenance organization. We found similar levels of variation across care utilization metrics with the exception of specialty care, in which the military sample had less variation than its civilian counterpart did. In the military system, risk-adjusted utilization levels were substantially lower for primary care visits and higher for specialty care visits, compared to these visits under the civilian system. Our findings suggest that expanding the use of the civilian system might not achieve the desired efficiencies. Rather, focusing on specialty care in the military system and expanding primary care in the civilian system could help achieve operational readiness and enhanced efficiency.