The Seattle Prepaid Health Care Evaluation Project is a comparative study designed to assess the care received by persons enrolled in either a large prepaid group practice (PGP) or in a prepaid, independent practice setting in which physicians are reimbursed on a fee-for-service basis (IPP). As part of the study we assessed the patterns of surgical care for hysterectomy, cholecystectomy, appendectomy, and tonsillectomy/adenoidectomy. Overall, there were 215 such procedures with an exposure adjusted rate being five times higher in the IPP than in the PGP. After eliminating 43 per cent of procedures in the IPP and 22 per cent in the PGP which did not meet specified criteria for either necessary, appropriate or justifiable surgery, the exposure-adjusted rate differential was 3.9 times higher in the IPP with the difference in the rates being mainly attributable to hysterectomy and tonsillectomy/adenoidectomy. We conclude there were more unnecessary procedures in the IPP, but the fact that a significant difference in the incidence of surgery persisted even after elimination of such cases suggests that the differences in rates of surgery between the IPP and PGP cannot be solely attributed to a higher rate of inappropriate surgery in the IPP.