Surgical Low-Value Care Between Fee-For-Service and Salaried Health Care Systems

Low-value care has been recognized as a pernicious phenomenon that increases health care costs and contributes to suboptimal care delivery. Low-value surgery may be less likely in systems that used salaried reimbursement as opposed to fee-for-service.

To explore the association of reimbursement model with low-value surgery among a battery of elective procedures.

This cohort study used TRICARE health care claims to compare rates of low-value surgery over fiscal years 2016 to 2023. Participants included patients aged 10 years and older who underwent acromioplasty, partial knee meniscectomy, shoulder rotator cuff repair, wrist arthroscopy, or ankle arthroscopy. Data were analyzed from January to May 2025.

Direct vs private sector care.

The primary outcome was the comparison of low-value care in patients in direct care vs private-sector care. An interaction between environment of care and year of surgery was retained in all models. Multivariable logistic regression analyses were used to adjust for case mix. Secondary analyses were limited to non-active-duty individuals to account for differences in low-value care for each surgical procedure.

A total of 304 908 procedures were included. The mean (SD) patient age was 47.2 (12.9) years, with 189 648 (62%) male patients. Partial meniscectomy was the most common surgical procedure (128 363 procedures [42%]), followed by acromioplasty (87 721 procedures [29%]). The percentage of low-value surgery in direct care was 20%, compared with 35% in the private-sector (χ22,304 908 = 90007.01; P < .001). After adjusting for case mix, the private sector demonstrated significantly greater odds of low-value surgery (odds ratio [OR], 1.41; 95% CI, 1.38-1.45). Low-value surgery was significantly lower in each respective sector for 2020 to 2023 compared with 2016 to 2019 (direct care: OR, 0.78; 95% CI, 0.73-0.83; private sector: OR, 0.93; 95% CI, 0.91-0.96).

In this cohort study of 304 908 surgical procedures, direct care evinced a significantly lower likelihood of low-value surgery in both 2016 to 2019 and 2020 to 2023. These findings support the contention that changing clinician reimbursement models from fee-for-service to salaried is associated with lower rates of low-value care.