How surgeons are paid may meaningfully influence how often patients receive low-value outpatient surgery, with fee-for-service environments linked to higher rates of potentially unnecessary procedures, according to a study published Dec. 2 in JAMA Network Open.
Researchers from Boston-based Harvard Medical School and the Uniformed Services University of the Health Sciences in Bethesda, Md., analyzed TriCare claims from the U.S. Military Health System from 2016 to 2023, comparing outcomes across 304,908 outpatient elective procedures performed in the system’s salaried “direct care” facilities or in private-sector civilian settings reimbursed under fee-for-service.
1. Fee-for-service care was strongly associated with higher low-value surgery rates.
Across 304,908 outpatient procedures in the Military Health System from 2016 to 2023, low-value surgery occurred at a much higher rate in the private-sector fee-for-service setting than in the salaried direct care setting. Overall, 35% of private-sector procedures met low-value criteria, compared with 20% in salaried direct care. After adjusting for case mix, procedures done in the private sector had 41% higher odds of being low value.
2. Low-value surgery is declining, but the reduction was much stronger in salaried care.
The study found that low-value procedures fell across both environments between 2016 and 2019 and between 2020 and 2023, suggesting a broader systemwide shift toward tighter surgical appropriateness. Of the 98,150 low-value procedures identified, 56% occurred between 2016 and 2019, versus 44% between 2020 and 2023. In adjusted models, low-value care dropped more sharply in salaried direct care than in the private-sector FFS environment.
3. The private-sector disadvantage persisted, and may be widening, across both time periods.
Even when broken into two eras, outpatient procedures performed in the private sector consistently had higher odds of low-value surgery compared to direct care. From 2016 to 2019, private-sector care had 29% higher odds of low-value surgery relative to direct care. From 2020 to 2023, that gap widened: private-sector procedures had 55% higher odds than direct care in the same period.
4. The procedures examined are common ASC lines and already high on payer scrutiny lists.
The study focused on elective outpatient procedures that have well-defined literature identifying low-value scenarios, especially when performed “alone” in certain age groups. The most common procedure was partial meniscectomy, accounting for 42% cases, followed by acromioplasty, with 29% cases. Overall, 32% of procedures met low-value criteria, including large volumes in high-throughput orthopedic categories.
5. Payment reform alone will not eliminate low-value surgery
Even in the salaried direct care environment, 1 in 5 procedures met the study’s low-value criteria, showing that incentives are important but not the only driver. The authors cite variation in physician beliefs, patient preferences, clinical uncertainty and clinician-induced demand dynamics as contributors to unnecessary procedures.
