The Looming Shadow of Layoffs

For years, the narrative surrounding home health has centered on a critical workforce shortage. However, 2025 witnessed a surprising, and unsettling, shift: layoffs. Major players like Bayada Home Health Care reduced its headquarters staff by 10%, citing a difficult reimbursement environment. DispatchHealth scaled back operations in ten markets, resulting in employee reductions. These weren’t isolated incidents.

Healthview CEO Steven Gonzalez succinctly captured the prevailing sentiment: “You can 10x an employee by amplifying them with technology, but the reality is, we did have to lay people off, just like a lot of other home health [companies] had to do.” This trend is expected to continue in 2026, driven by ongoing Medicare rate cuts and the relentless pressure to control costs. Agencies will increasingly prioritize efficiency-improving technologies, but these gains may not be enough to offset the financial strain, leading to further workforce reductions.

The Peril of ‘Enshittification’ in Home Health

Technology is no longer a luxury in home health; it’s a necessity. Providers are actively seeking ways to leverage artificial intelligence (AI) and other digital tools to streamline operations and improve efficiency. However, a critical question arises: can technology be implemented without sacrificing the human element of care? The concept of “enshittification” – the gradual decline in quality of digital platforms – looms large. Just as social media platforms can become overwhelmed with irrelevant content, home health risks automating care to the point where it feels impersonal and detached.

The key lies in finding a balance. AI should *augment* caregivers, not replace them. Successful agencies in 2026 will prioritize AI tools that enhance human connection, improve communication, and empower patients. As technology evolves, rigorous quality control and a commitment to patient-centered care will be paramount. What steps are your agencies taking to ensure technology serves, rather than diminishes, the quality of care?

The Rise of TEAM and Regional Competition

January 1, 2026, marked the implementation of the Centers for Medicare & Medicaid Services’ (CMS) Transforming Episode Accountability Model (TEAM), a mandatory bundled payment program poised to reshape the home health landscape. Unlike previous bundled payment models that focused on individual provider performance, TEAM introduces a regional competitive element. Brian Fuller, managing director of ATI Advisory, explains: “This is a regional target price model, which means you’ve got to be better than your region.”

With 743 participating hospitals implicated, providers must demonstrate their value proposition to hospitals and collaborate effectively to achieve shared savings. Data analytics and compelling communication will be essential for success. This shift demands a new level of strategic partnership and a commitment to regional collaboration.

The Erosion of the ‘Pure-Play’ Provider

In 2025, the industry rallied against proposed Medicare cuts, but the threat also spurred providers to explore diversification strategies. Some considered scaling back skilled home health offerings to focus on other service lines, such as hospice. Empath Health CEO Jonathan Fleece noted, “Skilled home health already runs at an operating loss for many agencies. That’s one of the options on the table, is we would potentially be one of those skilled agencies that would repurpose home health, and focus on our core business of end-of-life care and the frail elderly.”

While the final rule included a less severe cut than initially proposed, the underlying financial pressures remain. This is accelerating a trend towards diversification, with providers expanding into adjacent services to mitigate risk. The era of the “pure-play” home health agency is waning, replaced by organizations offering a continuum of care. This trend is further supported by the growing recognition of the benefits of integrated care models.

Hospital-at-Home: A Future on Hold?

Hospital-at-home (HaH) services hold immense promise for reducing costs and improving patient outcomes, but regulatory uncertainty continues to stifle growth. The Acute Hospital Care at Home waiver program, crucial for HaH’s viability, has been sustained through a series of short-term extensions, creating a precarious investment climate. The potential passage of the Hospital Inpatient Services Modernization Act, which would extend the waiver through 2030, is critical, but time is running out.

The recent closure of Inbound Health, a well-funded HaH enablement platform, underscores the severity of the situation. Without regulatory clarity, innovation will stall, and the potential of HaH may remain unrealized. Will lawmakers prioritize the long-term benefits of HaH, or will regulatory limbo continue to hinder its progress? The future of this promising care model hangs in the balance.

The Shifting Landscape of Vertical Integration

The completion of the UnitedHealth Group/Amedysis deal in 2025 signaled a continuation of the trend towards vertical integration. However, this trend is facing increasing scrutiny. The proposed Patients Over Profits Act, which would prohibit insurers from acquiring home health providers, represents a significant challenge to payvider models. Rep. Pat Ryan (D-N.Y.) argues, “Breaking up UnitedHealth’s insurance and physician businesses is the first step toward building something better, where every American is able to get the care they deserve at a price they can afford.”

Concerns about inflated care prices and regulatory loopholes are fueling the pushback against vertical integration. While consolidation may not cease entirely, 2026 is likely to see a slowdown in large-scale acquisitions, particularly if Democrats gain control of Congress. The industry is entering a period of retrenchment, where scrutiny and regulation will likely outweigh rapid expansion.

Further reading on the impact of consolidation can be found at the Kaiser Family Foundation and the Federal Trade Commission.

Frequently Asked Questions About the Future of Home Health

• What is the biggest challenge facing home health agencies in 2026?

  Navigating the complex interplay of declining reimbursement rates, workforce shortages, and evolving payment models represents the most significant challenge. Agencies must prioritize efficiency, diversification, and strategic partnerships to survive.

• How will the TEAM model impact home health providers?

  The TEAM model will introduce regional competition, requiring providers to demonstrate their value proposition to hospitals and collaborate effectively to achieve shared savings. Data analytics and compelling communication will be crucial.

• What role will technology play in the future of home health care?

  Technology is essential for improving efficiency and quality of care, but it must be implemented thoughtfully to avoid “enshittification” and maintain a human-centered approach. AI should augment, not replace, caregivers.

• Is vertical integration still a viable strategy for home health providers?

  While vertical integration remains a possibility, it faces increasing scrutiny and potential regulatory hurdles. The trend is likely to slow down in 2026 as policymakers and the public question the benefits of payvider models.

• What is the outlook for hospital-at-home services in 2026?

  The future of hospital-at-home remains uncertain due to regulatory limbo. Without a long-term extension of the Acute Hospital Care at Home waiver program, innovation will likely stall and growth will slow.