Healthcare is essential for employees, as it helps companies support their staff and families while showing dedication to their well-being. But rising healthcare costs can make it challenging for employers to provide quality healthcare benefits to their employees and instead struggle to balance healthcare costs with maintaining their bottom line.
In this post, we will discuss why healthcare costs keep increasing and offer a solution to stabilizing prices through partnering with a PEO.
Reasons Healthcare Costs Keep Increasing
Healthcare costs are rising faster than normal, and several factors contribute to these increasing costs. These trends include:
- Technological advances in medical treatments. The development of new, expensive machinery that requires specialized professionals provides greater treatment access to patients while making it more costly to treat them in local hospitals.
- Costs of specialty medicine and treatment. New research and medical breakthroughs led to the development of specialty medicines and treatments for highly specific, life-threatening illnesses. However, the high development cost and the small pool of people needing treatment means those costs are offset by the insurers covering them.
- An aging population and a rise in chronic conditions. The U.S. population is aging, and greater treatment capacity makes treating those with chronic conditions possible. However, more frequent care causes higher healthcare costs.
- Administrative costs between hospitals and insurance providers. Hospitals and insurance providers need a lot of personnel to manage payments and negotiate what insurance will cover, contributing to the overall healthcare cost. As more people receive treatment, more personnel is necessary to help keep that organized.
Despite these challenges, employers who want to provide quality healthcare benefits to their employees have options for doing so with lower, stabilized costs. By partnering with a Professional Employer Organization (PEO), employers can gain access to cost-effective solutions to their health and benefits plans, helping them lower costs without sacrificing their excellent employee care.
How a PEO Can Help Stabilize Costs
PEOs can stabilize healthcare costs for the same reasons they can offer better benefits packages in the first place – economies of scale. By pooling resources and sharing costs across a larger group, PEOS can provide significant cost savings, ultimately leading to a more sustainable benefits program. That allows PEOs to offer higher-quality benefits than businesses can typically afford themselves while doing so at a lower rate.
They have the knowledge and expertise to navigate the complex world of healthcare benefits, helping employers create customized wellness programs and gaining access to valuable resources and information for their employees.
The benefits of partnering with a PEO go beyond healthcare, as they can also support your HR team by managing payroll and providing access to voluntary benefits, such as dental and vision insurance or retirement planning.
Support Your Staff with Quality Care
Offering healthcare benefits to employees supports their health needs, but it also demonstrates the company cares for their well-being. When employees feel valued and supported, they are more likely to stay with the company long-term, leading to lower turnover rates and a more stable workforce. People want to work for companies that care about them, and healthcare packages are a baseline for achieving that.
Your PEO partner can provide additional support by helping you conduct training and ongoing professional education, further demonstrating your investment in your staff. That creates a happier, healthier workforce who is more likely to stay with your company and be productive while doing so.
Stabilize Healthcare Costs by Working with a PEO
Rising healthcare costs can significantly burden employers, but partnering with a PEO can help alleviate this challenge. By leveraging the expertise of a PEO, employers can gain access to cost-effective solutions and create customized benefits packages that meet the needs of their employees.
In addition to cost savings, offering quality healthcare benefits can help to attract and retain top talent, leading to a more stable and productive workforce. Overall, investing in the health and well-being of employees is not only the right thing to do but also makes good business sense.
So, if you're looking to manage rising healthcare costs while still providing quality healthcare benefits to your employees, consider partnering with a PEO. Their expertise and solutions can help you create a sustainable benefits program that meets the needs of your employees and your business.