Healthcare & Medical Practices
PEO Cost Calculator
Compare PEO costs vs managing HR in-house for your healthcare & medical practices business. Calculate real ROI including hidden savings from reduced turnover, compliance protection, and group purchasing power.
Healthcare & Medical Practices Industry Benchmarks
Calculation Methodology
Current Cost Calculation: We sum all direct HR costs (staff compensation, payroll processing, workers' comp, health benefits, compliance, EPLI, recruiting) plus the opportunity cost of owner time spent on HR activities (valued at $75/hour).
PEO Cost Calculation: PEO admin fee x employees x 12 months, plus adjusted health benefits cost (reduced by 10% through PEO group purchasing), plus adjusted workers' comp (reduced by 22% through PEO pooled programs).
Hidden Savings: We calculate additional PEO value from: (1) Turnover reduction — PEO clients average 10-14% lower turnover (NAPEO data), valued at the industry-specific replacement cost; (2) Compliance penalty avoidance — estimated at $3,500/year average for the healthcare & medical practices industry; (3) EPLI coverage value — typically $3,000-$8,000/year when purchased separately.
Limitations: Actual PEO costs vary by provider, location, and specific services included. This calculator provides estimates based on industry averages. Request actual PEO quotes for accurate pricing.
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Why Healthcare & Medical Practices Businesses Use PEOs
Healthcare and medical practice employers face uniquely complex HR requirements, including HIPAA compliance, credentialing, licensing tracking, and specialized safety standards. These requirements make HR administration significantly more burdensome than in most other industries.
While healthcare turnover (26%) is lower than many industries, the replacement cost is among the highest — averaging 100% of the departing employee's annual salary for clinical staff. This makes retention through competitive benefits particularly important.
Medical practices often struggle to offer competitive benefits packages because they're too small for large-group rates. PEOs solve this by pooling practices together, providing access to health coverage plans comparable to those offered by large health systems — a critical competitive advantage for recruitment.
OSHA's bloodborne pathogen standard, HIPAA training requirements, and state-specific scope of practice regulations create ongoing compliance obligations. PEOs with healthcare industry experience provide specialized compliance support that general HR services cannot match.
What a PEO costs a healthcare or medical practice
Healthcare employers carry heavy compliance and a workforce that is expensive to lose. A PEO takes on payroll, benefits, workers compensation, and HR compliance, and gives clinical and support staff access to large-group benefits that help retain hard-to-replace people.
PEOs price as a percentage of payroll or a flat per-employee-per-month fee. This calculator estimates the cost against your headcount and payroll so you can weigh it against in-house HR and benefits administration.
What this calculator accounts for:
- HR compliance in a regulated environment
- Large-group benefits to retain clinical staff
- Payroll and workers compensation administration
- Onboarding and credentialing-adjacent HR support
For broader context, see NAPEO, the national PEO industry association.
Compare what a PEO bundles against doing it yourself, then test the benefits side in the Benefits ROI Calculator and the Health Plan Cost Projector.
Frequently asked questions
Why would a practice use a PEO?
Because compliance and benefits administration are heavy relative to staff size, and retaining clinical staff is costly. A PEO absorbs the admin and improves benefits access.
How is PEO cost structured?
As a percentage of payroll or a flat per-employee-per-month fee. The calculator estimates it from your numbers.
Does it help retain clinical staff?
It can, by giving access to stronger benefits than a small practice could secure alone.