When the federal government squeezes the system, providers are forced to make impossible trade-offs:
Even states with historically robust HCBS programs are now signaling service cuts, rate freezes, or eligibility rollbacks. In California, for instance, HCBS programs are under financial pressure due to higher-than-expected enrollment and spending, particularly among aging adults and people with disabilities, amid tightening state budgets.
All of this adds up to one clear truth: the margin for error in home care has disappeared.
If the past decade was about growth and expansion, 2025 will be about resilience and efficiency. To survive and succeed, agencies must shift their mental model from scale first to margin first.
Here’s a framework to guide that shift:
When reimbursement shrinks, the only path to profitability is through streamlined processes. This includes:
Operational inefficiencies—such as redundant data entry, manual administrative tasks, and staffing challenges—can lead to substantial financial losses for home care agencies. While exact figures vary, these inefficiencies collectively contribute to increased operational costs, highlighting the importance of streamlined processes and effective workforce management.
With audit frequency rising, paper-based or semi-digital systems are no longer safe. States like Texas and New York have already ramped up real-time EVV (Electronic Visit Verification) audits, and failure to produce instant documentation can lead to suspended reimbursements.
Being “audit-ready every day” means:
This level of discipline reduces financial and operational risk, but it also signals to regulators that your agency is structured, responsive, and scalable.
Caregiver turnover — According to PHI, the turnover rate for home care workers was nearly 80% in 2024.— becomes even more devastating when budgets are constrained.
Each caregiver lost can cost up to $3,000–$5,000 in recruiting, onboarding, and lost productivity. Retention isn’t just a culture problem anymore, it’s a bottom-line issue.
The best retention strategies today are:
Agencies that invest in training infrastructure tailored for high-turnover environments—such as multilingual, asynchronous, and mobile-first platforms—often experience improved caregiver retention rates. Moreover, fostering caregiver engagement and recognition significantly enhances retention.
For instance, looking outside of home and healthcare, Gallup's meta-analysis indicates that highly engaged employees are substantially less likely to leave their jobs, with turnover rates 18% lower in high-turnover organizations and 43% lower in low-turnover organizations. Additionally, the 2023 OC Tanner Global Culture Report highlights that employees who feel recognized are significantly more likely to remain with their organization.
Looking more closely at home care, specifically at AccentCare—a joint customer of Nevvon and Caribou—recognizing caregivers for completing training led to a 35% increase in training completion rates when tied to recognition or rewards.
Additionally, the Home Care Alliance of Massachusetts, in collaboration with Nevvon, implemented a two-year mentorship program across 27 home care agencies. This initiative paired experienced caregivers with new hires, providing structured support during the initial 60 days of employment. As a result, participating agencies saw retention rates surge from a baseline of 66.41% to 96.97%.
As changes unfold, leaders should be asking:
These questions are not just strategic — they’re existential.
The current shift isn’t a temporary storm. It’s a litmus test for agency preparedness. Organizations that cling to legacy processes, disconnected tech stacks, and reactive compliance strategies will struggle to survive.
Those that focus on margin control, retention systems, and daily audit readiness will not only survive — they’ll thrive as consolidation reshapes the industry.
more to come