Understanding Healthcare Cost Trends: What’s Driving Costs–and What We Can Do About It

Initially developed for diabetes and now widely prescribed for weight loss, GLP-1 drugs are creating new challenges for group health plans. With annual costs exceeding $10,000 per user and demand rapidly increasing, these medications are significantly impacting employer-sponsored plans.

Groundbreaking treatments for rare conditions and chronic diseases are improving patient outcomes—but at a high cost. These innovations offer long-term potential but require strategic planning to manage their impact on premiums and claims.

Many individuals deferred routine care during the pandemic and are now returning to the healthcare system with more complex conditions. This treatment delay leads to increased claims severity and higher overall plan costs.

AI reduces inefficiencies across the healthcare system, from enhancing diagnostic accuracy to automating claims processing. As adoption grows, it offers the potential to reduce unnecessary care and lower costs.

Virtual care continues to deliver convenience and cost savings. With increased access to primary and mental health services, telehealth reduces reliance on urgent care and emergency room visits.

This ongoing shift from fee-for-service to outcome-based care prioritizes prevention and chronic condition management. The result? Long-term cost savings and better patient outcomes.

While high-cost drivers like GLP-1s and specialty medications remain part of the healthcare landscape, innovation and smarter benefit strategies offer a path forward. At PrestigePEO, we’re doubling down on data-driven insights and collaborative planning to help clients maintain competitive, cost-effective plans.

Through our purchasing power and deep carrier partnerships, PrestigePEO delivers access to competitive rates and long-term pricing stability for your benefits portfolio.

Encouraging annual wellness visits, screenings, and employee wellness programs helps catch issues early, improving outcomes and reducing costs over time.

We’ll work with you to assess plan performance and identify opportunities for design updates, new cost-saving tiers, or supplemental offerings that better serve your workforce.

Employees who understand their benefits make smarter decisions. To drive better outcomes, we help educate your team on plan usage, provider networks, formulary alternatives, and telehealth options.