partial capitation

An insurance arrangement where the payment made to a health plan is a combination of a capitated amount and a payment based on actual use of services. The proportions specified for these components determine the insurance risk faced by the plan.

patient-centered care

An approach that takes into consideration the patients’ cultural traditions, personal preferences and values, family situations and lifestyles. Responsibility for important aspects of self-care and monitoring is put in patients’ hands–along with the tools and support they need.

patient-centered medical home

An approach to providing comprehensive primary care for individuals through creating a setting that facilitates partnerships between individual patients and their personal physicians. This approach to care is aided by registries, information technology, health information exchanges and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.

pay for performance

Also known as Value-Based Payments or Value-Based Purchasing, a method of paying health care providers differing amounts based on their performance on measures of quality and efficiency. Payment incentives can be in the form of bonuses or financial penalties.

payment reform

Payment reform seeks to improve current mechanisms for reimbursing providers by including rewards for provider quality in the reimbursement mechanisms. (See ACA chapter.)

payroll tax

A flat percentage tax collected on salaries and wages. A payroll tax of 7.65 percent on both employers and employees finances Social Security cash benefits and Medicare Part A hospital services. Of that 7.65 percent, 1.45 percent each, or a total of 2.9 percent of payroll with both employer and employee contributions, is allocated for Medicare. Funding of the Affordable Care Act (ACA) will come in part from higher Medicare payroll taxes on families making more than $250,000, starting in 2013.

per capita cap

A proposed method of federal Medicaid funding in which the federal government sets a limit on funding per state enrollee. This method does provide additional funding if enrollment increases, but not if average costs per enrollee increase.

personalized medicine

A medical model that emphasizes the customization of health care to the individual patient. Personalized medicine commonly denotes the use of some kind of technology or discovery that allows a level of personalization that was not previously feasible. Currently, the use of genetic information has played a major role in aspects of personalized medicine.

Pioneer ACO Model

Designed for health care organizations and providers that are already experienced in coordinating care for patients across care settings. It allows these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with the Medicare Shared Savings Program. It also works in coordination with private payers by aligning provider incentives, which is intended to improve quality and health outcomes for patients across the ACO, and achieve cost savings for Medicare, employers and patients.

point-of-service plan (POS)

A managed care plan that combines features of both prepaid and fee-for-service insurance. POS plan enrollees decide whether to use network or non-network providers at the time care is needed, but sometimes require referrals and usually are subject to reduced coverage and larger copayments for using non-network providers.

practice guidelines

A statement of the known benefits, risks and costs of particular courses of medical action, developed to give physicians information about treatment alternatives.

pre-existing condition

A physical or mental condition of an individual which is known to the individual before an insurance policy is issued. Before the Affordable Care Act (ACA), insurers could choose not to cover treatment for such a condition, at least for a period, raise rates because of it, or deny coverage altogether. The ACA prohibits pre-existing condition exclusions.

precision medicine

An emerging approach to disease treatment and prevention that takes into account individual variability in genes, environment, and lifestyle for each person.

preferred provider organization (PPO)

A health care delivery system through which a number of providers contract to serve health plan enrollees on a fee-for-service basis at discounted fees. Providers agree to PPO discounts in the hope of gaining more patients. Patients may use any provider without a referral, in network or out, but have a financial incentive — for example, lower coinsurance payments — to use doctors on the preferred list.


The cost of health plan coverage, not including any required deductibles or copayments. The cost of the premium may be shared between employers or government purchasers and individuals.

premium subsidies

A fixed amount of money or a designated percentage of the premium cost that is provided to help people purchase health coverage. Premium subsidies are usually provided on a sliding scale based on an individual’s or family’s income. The Affordable Care Act (ACA) provides premium subsidies through refundable pre-tax credits to individuals with incomes between 133 percent and 400 percent of the federal poverty level who purchase policies through the health insurance exchanges beginning in 2014.