Containing Health Care Costs & Enhancing Price Transparency

When seeking health care today, there is often a huge discrepancy in the prices charged. A service that costs $1,000 at one facility might be billed $10,000 or more at another just a few miles away. And this is virtually invisible, as costs for health care are typically revealed only after the fact, when billed.


This lack of price transparency makes it hard for health plans or consumers to make informed decisions about where to seek health care or even plan for expenses. This situation also makes it hard for employers to contain health benefit spending, and frequently results in paying far too much for care – ultimately inflating health care costs across the board.


To address the lack of price transparency that exists, Cypress Benefit Administrators partners with HST to offer self-funded employers options for a value-based payment (commonly referred to as VBP, value-based pricing, reference-based pricing or RBP) plan. The main goal with VBP is to eliminate unreasonable and exorbitant charges for health care by establishing a fair price by service up front.



Here’s a glimpse at how VBP works with the self-funded plans Cypress administers:

  • A reasonable reimbursement rate is established by service using the Medicare allowable price as a benchmark and adding a set percentage above that.
  • Cypress and HST collaborate with the provider community and create a network of participating facilities that agree to offer high-quality medical services at the negotiated VBP rates.
  • Plan members are educated about how VBP is set up, why it creates so much value and which providers take part in the fair pricing structure.
  • The reasonable reimbursement rates are paid once services are delivered and, as a result, members and health plans realize substantial savings.


With the VBP structure in place, Cypress clients are averaging 70% savings on medical care costs. It’s become a way for self-funded health plans all across the U.S. to save significant amounts of money!

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