The Top 4 Trends Affecting the Home Health Care Industry in 2025

For home health providers, 2025 is shaping up to be a year of both growth and continued challenges. While demand for care is at an all-time-high, hiring and retaining caregivers continues to be an obstacle for industry leaders. Advancements in technology are broadening the scope of patient care and improving operational efficiency for providers, yet financial pressures only continue to intensify. 

Here are the top four trends affecting the industry in 2025. 

Trend 1: Staffing shortages persist, but technology promises some relief. 

It’s hard to find good care providers—and even harder to keep them. 

Since 2022, the median turnover rate for professional caregivers has continued to rise, hovering in the high 70th percentile. With nearly four out of five caregivers leaving their jobs in the first year, the quality of care suffers—and replacing these providers is only becoming more difficult as demand increases. 

As the population of individuals aged 65 and older grows at an unprecedented rate, the need for care is expanding, which results in a widening gap between the number of caregivers and the demand for care. Available employment in the home health care field is projected to grow 21 percent from 2023 to 2033. And in a recent survey, three-quarters of individuals said they want to stay in their homes as they age. 

Technology, though nowhere near a full solution, can help alleviate the pain. Increased collection of and access to data will enable home care agencies to better predict market demand and better align their hiring volumes to meet anticipated patient demand. AI is also being used by providers to identify, recruit, and train future caregivers.  

Trend 2: Low reimbursement rates increase pressure on home care providers. 

The Centers for Medicare & Medicaid Services (CMS) estimates that its updated rates will result in Medicare paying out a total of $85 million more to home health agencies in 2025 than in 2024. This may seem like a significant investment, but it amounts to a mere 0.5% aggregate increase year over year—not nearly enough to offset inflation driving up the cost of care. 

The new presidential administration will bring additional changes for care providers. From the potential expansion of Medicare Advantage to changes within CMS, there are still many unknowns around reimbursement, rate changes, and differences in payer mix that will impact the market in the coming years. 

Trend 3: Technology and data drive efficiency and expand care options. 

Faced with increasing financial challenges, home health agencies are leveraging technology to run more efficiently and expand the services they offer.  

Savvy use of data analytics is giving home care providers a better understanding of the populations they serve—helping them predict patient volume, make more accurate revenue forecasts, and identify expansion opportunities earlier.  

Improved collection and analysis of data can not only help providers scale but also enable companies to meet regulatory reporting requirements more efficiently, a significant cost saver. 

At the same time, advances in AI, telehealth, and IoT devices are broadening the population of people who can be cared for at home. The enhanced ability to monitor, assess, and evaluate patients is expanding the possibility of providing more complex treatment for higher acuity patients who in the past would have had to enter a care facility.   

Trend 4: Consolidation continues amid scrutiny from regulators.  

The pace of consolidation shows no signs of slowing, as large companies buy up smaller players to increase their scale and expand their geographic footprint. Meanwhile, the infrastructure and resources necessary to meet regulatory requirements are causing some independent providers to become acquisition targets or leave the market.  

These deals are taking place against a backdrop of uncertainty about how the new presidential administration will influence regulators’ scrutiny over mergers and acquisitions. Under the previous administration, anti-trust actions arose. For example, in November, the Department of Justice sued to block the $3.3 billion merger between UnitedHeath Group and Amedisys, arguing the deal would give UHG too much control over some markets, including in home care. 

As they fight the DOJ in court, the two companies have extended the deadline for closing the merger to December 31, 2025.  It is unclear how the new administration will impact such deals. 

In conclusion, the home health care industry in 2025 is navigating a complex landscape marked by both opportunities and challenges. While the demand for home health services continues to rise, driven by an aging population and a preference for aging in place, the sector faces significant hurdles in staffing and financial sustainability. Technological advancements offer promising solutions to improve efficiency and expand care options, yet the pressure from low reimbursement rates and regulatory scrutiny remains a concern. As the industry adapts to these trends, home health care providers must remain agile and innovative to meet the evolving needs of their patients and ensure the delivery of high-quality care.