9cff82d2__Your_Indispensable_Guide_TIME__What_it_is
[Term] Capitation [Why it matters] Capitation gives providers an incentive to offer cost-effective care, while still keeping patients healthy. But it can leave providers vulnerable to substantial losses if enough patients in a capitated group need expensive care. [What it is] 
A flat fee a health insurer pays to a provider to care for a patient's medical needs  as opposed to individual reimbursement for each service provided. Capitation became popular with HMOs during the 1990s, but interest in it waned when providers claimed they were not being adequately compensated for the care they delivered.
Understanding the Health-Care Debate: Your Indispensable Guide-TIME
What it is