Industry survey: Rising costs, Medicaid cuts likely to hinder home care agencies’ growth

A survey of more than 300 home care respondents across the United States has identified several key trends shaping the industry, with the most notable findings centered on economic pressures that are expected to continue into the future.

For the third consecutive year, client affordability and rising costs of staff, supplies and services remain the largest obstacles to growth, according to the survey by AxisCare, a Texas-based provider of home care software. About 61% of survey respondents rated these challenges as either “very big” or an “extreme hindrance” to expansion, which limits their ability to serve their communities.

Compared to last year’s survey, profitability concerns increased from 13% to 34%. The caregiver shortage remains a top issue, but concern about this actually decreased in this year’s results, from 59% to 53%. However, perceived office team effectiveness decreased significantly, from 31% to 19%, making that into a top pain point for agencies.

This is AxisCare’s third annual survey of home care factors impacting the industry. AxisCare specializes in private pay, Medicaid, VA billing, and intellectual and developmental disabilities (IDD), and provides back-office scheduling and point-of-care solutions that help agencies in all 50 states and four countries. Survey respondents reflect a mix of agency sizes and roles, including home care agency owners, executives and employees.

Medicaid concerns

Medicaid cuts are also top of mind for home care agencies. When asked how the One Big Beautiful Bill Act might impact their businesses, 55% of respondents identified reductions in Medicaid provider taxes as having the greatest hindrance on home care operations, while 45% believe it will have a very large or huge impact on their ability to scale.

AI, a leading tech trend

Another key finding is the growing use of artificial intelligence, which was cited as a leading technology trend by 65% of respondents. Use of AI is taking the form of client and caregiver shift matching as well as automated scheduling, caregiver recruiting, training and care plan visit documentation.

AxisCare CEO Todd Allen noted that the study results highlight that the industry is getting smarter under pressure. “Home care agencies have shifted from expansion-focused strategies to sustainable growth powered by technology,” he said in a statement. “We’re seeing AI move from nice-to-have to essential, helping agencies support their caregivers and deliver better care with the resources they have.”

The full report can be downloaded at AxisCare’s website.

This story originally appeared in McKnight’s Home Care.