Bending the Curve: What Economic Rules Reveal About Home Care’s Crisis
Bending the Curve – What Economic Rules Reveal About Home Care’s Crisis
The famous economist and author Ray Dalio is known for refining complex economic cycles into simple, yet powerful principles. His thesis comes down to three rules:
- Do not have debt rise faster than income.
- Do not have income rise faster than productivity.
- Do all that you can to raise your productivity.
At first, these rules sound unrelated to home care, home health, and the broader post-acute care market. However, if you look closer, these same forces have been reshaping our industry in ways we cannot ignore, or else we risk breaking all three rules. Let’s unpack what’s happened — and, more importantly, where we go from here:
Rule #1: “Do not let debt ride faster than income.”
Let’s be upfront: our healthcare system broke this rule long ago. COVID-19 accelerated an already fragile system into deep debt. The post-COVID reality? Budget cuts. Reimbursement pressures. A crucial workforce that’s leaving for higher-paying, lower-stress jobs at places like Amazon. Rates haven’t kept up with costs, and providers are left trying to make ends meet in a system already stretched thin.
Rule #2: ”Do not have income rise faster than productivity.”
During the pandemic, bonuses were essential. They brought people back to work when we needed them most. But over time, those bonuses became a band-aid that did not address the underlying staffing and retention issues. Instead of long-term solutions, we incentivized short-term behavior, where “bonus chasing” became the norm. Once the bonuses disappeared, many caregivers left for easier, higher-paying employment opportunities. While income (temporarily) rose, productivity didn’t keep pace.
Rule #3: ”Do all that you can to raise productivity.”
The last viable option we’re left with: increasing productivity. With caregiver supply not growing fast enough to meet demand, we need to “bend the curve”. This means doing more with the caregivers we have – not by asking them to work harder, but by fundamentally rethinking how our industry operates:
- Hire faster and smarter: Streamline credentialing and compliance to shrink the funnel from application to first shift.
- Focus on engagement: Understand when, where, and how caregivers want to work.
- Schedule smarter: Embrace time-saving technology to help optimize schedules and reduce burnout.
- Retain your workforce: Don’t just onboard – support your caregivers in every step of their career.
If we fail to raise productivity, we not only break Dalio’s final rule, we break the future of care itself – fewer care plans completed, more patients left without the support they need, and an industry we care deeply about becoming unsustainable.
It’s time to Bend the Curve
We can’t keep running the same playbook and trying to survive – we need to reshape it. Everything needs to change: how we hire, how we engage staff, and how we retain them. It’s time we ‘bend the curve’ and change the future of home care, home health, and post-acute care for good.