The home care space is constantly in flux, shaped by social and economic trends that present various challenges. Now, at the start of a new year, it’s time to refocus our attention on the industry’s most pressing needs. In 2025, technological advancements, regulatory changes, and evolving consumer expectations are set to make waves against financial uncertainty.
What does this mean for agencies? How will they adapt their strategies and service delivery according to the latest home care industry trends? We’ll be breaking down the must-know information you need for the new year and beyond.
The Economic Landscape of Home Care in 2025
According to The Future of Home Care: A 2025 Survey of the Home Care Industry & Future Trends, a third-party study commissioned by Axis Care and conducted by Leading Home Care… a Tweed Jeffries company, the economic outlook presents significant challenges for the industry. The survey found that 53% of agencies across the U.S. see economic conditions as a major challenge. The cost of seemingly everything is on the rise these days, from grocery bills to employee wages. Inflation has touched every corner of the economy, and home care agencies are feeling the strain in more ways than one, with 63% specifically concerned about the rising costs of staff, supplies, and services.
These home care industry trends reflect broader economic challenges that are reshaping service delivery and business operations across the sector. Understanding these shifts is crucial for agencies looking to maintain quality care while ensuring business sustainability.
How are Rising Costs Affecting Home Care Agencies?
Rising costs were identified as the most pressing barriers to growth, with 64% of respondents reporting that their primary concern over the next five years is the increasing cost of home care to consumers, followed by more expensive staff, supplies, and services.
Navigating economic challenges of this kind will require agencies to mind every dollar. With the right tools, they will be able to identify waste and trim around the edges – and in this industry, home care software is the way to go. These platforms are designed to optimize daily operations management from every angle, including automatically assigning caregivers to open shifts and optimizing their travel routes. They also take human error out of the equation, using intelligent algorithms and data-driven processes to keep everything running smoothly.
How Is the Increasing Cost of Home Care Affecting Consumers?
Home care agencies can’t absorb all of these rising costs on their own. Inevitably, consumers will spend more on point-of-care services as these expenses are passed down to them—but their wallets will eventually hit a limit. Organizations must find a way to cover their costs without pricing customers out of the equation, all while maintaining high-quality service.
Once again, using technology to automate processes like scheduling and payroll is key for streamlining operations and reducing admin costs. Supplementing in-person visits with telehealth services can also help reduce transportation-related costs, and cross-training caregivers to take on various roles can cut down on hiring needs.
What Is the Federal Government’s New 80/20 Rule & Its Implications?
Last spring, the 80/20 Provision within the Medicaid Access Rule was enacted. This rule mandates that at least 80% of all Medicaid Home and Community-Based Services (HCBS) payments must be used to compensate care workers (i.e., nurses, caregivers, and home health aides who serve patients receiving Medicaid).
Its main objective is to improve worker compensation and increase access to quality care. Still, the industry survey reveals that 43% of participants see the 80/20 rule as having a significant hindrance on their ability to grow their business over the next five years. The rule has also received pushback from The Home Care Association of America (HCAOA) for several reasons. Primarily, the HCAOA believes this rule ignores the root cause of the issue at hand (that being subpar reimbursement rates) and is concerned that by limiting how these funds can be spent, the rule may actually undermine its goals to improve wages and access.
For now, the 80/20 Provision isn’t going anywhere. Faced with budget restrictions and reduced flexibility regarding spending, home care agencies will need to keep the following considerations in mind:
- Free up funds that would otherwise have been spent on administrative costs by adopting software that can handle scheduling and point-of-care documentation.
- Regularly audit their cash flows to understand where funds are going and ensure they are being allocated efficiently.
- Pay special attention to employee satisfaction, supporting teams with growth opportunities and incentives to reduce costly turnover and recruitment.
What Role Does Technology Play in Overcoming Industry Challenges?
Technology is exceptionally useful for taking administrative work off employees’ plates, reducing instances of human error, and leveraging automation to complete tasks faster. The industry recognizes this potential, with 50% of survey participants identifying leveraging technology as a high to extremely high-growth opportunity over the next five years. Here’s why every home care agency should consider tailor-made software to solve its most pressing issues.
Automatic Scheduling
Unfilled shifts, no-shows, and unexpected schedule changes cost agencies money every day. In fact, home health care industry statistics show client and caregiver scheduling as the top system priority for future growth. When asked to select from 12 systems that have been identified as key to operating a successful home care agency, 51% of survey respondents reported wanting to focus on client and caregiver scheduling in 2025. Home care scheduling software takes care of every step, from intelligent matchmaking to filling open shifts and optimizing driving routes.
Smooth Onboarding
The U.S. is now home to more older adults than ever, and demand for home care is skyrocketing. Agencies will need as many caregivers on deck as possible, and they can’t afford to create a bottleneck during onboarding. Home care software can speed this process along, from attracting qualified applicants to delivering training materials and getting them on the schedule ASAP.
Mobile Apps
Caregivers are constantly on the go, and mobile apps ensure they can quickly pull up the details they need to conduct a successful patient visit. With this information at their fingertips, they can administer each service as prescribed and uphold the highest standards of care. Moreover, they can use the same app to track their time and complete EVV, removing friction from their administrative workflow.
Artificial Intelligence (AI)
According to our industry survey, 53% of agencies across America agree that AI has the greatest potential to transform the industry over the next five years. Its ability to rapidly analyze large quantities of information, then use its findings to predict future outcomes and produce highly personalized care plans is just the tip of the iceberg.
Actionable Insights
Identifying areas of improvement is the first step towards increasing efficiency. Business intelligence tools provide an overview of agency performance broken down by KPIs, so you can understand exactly what’s working (and what’s not) instead of guessing your way through the iteration process.
How Can Home Care Agencies Prepare for Future Challenges?
The best time to plant a tree was 20 years ago. The second best time is now. All the challenges discussed above have already taken root, and the onus is now on home care agencies to face them head-on.
A proactive attitude, technologies like home care software, thoughtful hiring practices, and competitive compensation will all play crucial roles in retaining the right talent and saving money in an increasingly costly market.
Improve Your Home Care Business With Axiscare
AxisCare’s home care technology platform has the features you need to meet today’s challenges and will continue to grow with you for years to come. Every day, we help agencies maximize their resources while freeing up countless hours that can be used to add value organization-wide.
Curious to know more? Request a free demo with our team.
