The True Cost of the Caregiving Crisis

Roughly 59 million Americans are providing care, administering medications, managing wounds, coordinating appointments, and monitoring chronic conditions every day. They are not clinicians. They are family members. And they are quietly holding the healthcare system together.

According to AARP and the National Alliance for Caregiving, more than 53–59 million Americans provide unpaid care to an adult loved one, contributing an estimated $470 billion to over $1 trillion annually in economic value. If formally recognized, family caregiving would represent one of the largest labor forces in the country.

For healthcare and payer organizations, the impact is already visible across the system. When family caregivers are stretched too thin, the effects show up quickly: more hospital readmissions, more emergency visits, longer stays, and a growing number of people who simply can’t keep up with caregiving at home.

Family Caregiving Is Holding the System Together

In the past, family caregiving has been treated as a private responsibility, something happening outside the healthcare system. That idea no longer reflects reality.

Today, caregiving functions as an extension of care delivery itself. Yet most caregivers enter the role without clinical training, structured support, or recognition from the systems that depend on them.

The gap between growing needs and available support is where risk and costs begin to rise.

Demand Is Accelerating

The caregiving crisis is being driven by three key forces.

1. An aging population with chronic disease- According to U.S. Census Bureau projections, by 2034, adults aged 65 and older will outnumber children under 18 for the first time in U.S. history. Longer lifespans combined with chronic disease mean more care is required—and more of it happens at home.

2. The rising cost of care - Most older adults prefer to age in place, but that preference is increasingly shaped by cost. Home care, assisted living, and skilled nursing have all risen steadily, while retirement income has not kept pace. As a result, families are absorbing more responsibility, often filling gaps when formal care is unaffordable or unavailable. 

3. Workforce shortages in formal care- Persistent shortages in the direct-care workforce are shifting responsibility back to families, often regardless of their readiness or training. Today, nearly 59 million Americans provide unpaid care, spending an average of about 27 hours per week supporting loved ones. At the same time, more than half of caregivers are now performing complex medical tasks in the home, yet only a small share receive any formal training or preparation.

Caregiving is no longer occasional support. It has become sustained healthcare delivery in the home, carried out by families who are increasingly filling systemic gaps in care.

The True Cost of Caregiving

Although caregiving is unpaid, its financial impact can be felt across the healthcare system, showing up in the following ways: 

• Delayed signals drive higher-cost utilization- Early signs of decline, such as missed medications, mobility changes, and cognitive shifts, often appear at home first. These signals can go unrecognized until they escalate into more serious events. Medicare hospital readmissions cost an estimated $15–$26 billion annually, with an average cost of about $15,200 per readmission. Many are preventable with stronger caregiver engagement and transitional care support.

• Caregiver strain is a workforce issue- As caregiving demands grow, the strain doesn’t stay at home; it shows up in the workplace. For healthcare employers, this translates into increased absenteeism, higher turnover, and reduced workforce capacity at a time when staffing is already stretched thin. In fact, 67% of employed caregivers report difficulty balancing work and caregiving responsibilities, with 27% reducing their work hours and 16% leaving the workforce temporarily due to these demands. Taken together, these disruptions contribute to significant losses in income and productivity across the U.S. economy.

Financial burden shifts rather than disappears- Family caregivers spend more than $7,000 annually out of pocket on care-related expenses. When those costs become unsustainable, care does not stop; it shifts, often resulting in earlier institutionalization, increased emergency utilization, and greater reliance on Medicaid. The costs are not eliminated. They are deferred and amplified.

How Early Signals Can Enable Proactive Support and Better Outcomes

The growing caregiving crisis is not only increasing strain on families but also exposing a deeper gap in how risk is identified and managed across the healthcare system.

Much of today’s care utilization, workforce disruption, and costs stems from one issue: early signs of decline often appear at home but aren’t recognized or addressed soon enough. That gap creates an opportunity for earlier intervention.

Meaningful changes in health and function rarely happen all at once. They emerge gradually through shifts in daily routines, behavior, and what can often be observed at home. When these signals are connected rather than viewed in isolation, emerging risk patterns can be identified earlier, creating opportunities for care teams to step in before a situation escalates.

For example, subtle changes such as reduced mobility or a gradual decline in daily activity may not seem urgent on their own. But when viewed together over time, they can signal an emerging risk that warrants earlier attention and support. 

This is how it often plays out in real families. Consider a common scenario: an older adult who has always been active begins skipping her morning walks. Her daughter, calling from out of state, notices she sounds more tired than usual but assumes it is the weather. A few weeks later, she falls in the kitchen. In hindsight, the signals were there. They just were not connected.

Earlier visibility into change allows support to be adjusted in real time, helping caregivers feel more informed, confident, and less reactive, while enabling care teams to respond earlier and more effectively as needs evolve.

These connected insights do more than reduce adverse events. They help older adults maintain confidence and independence at home while giving caregivers and families something equally important: time. Time to recognize changes sooner, adjust support gradually, and work with care teams to make informed decisions before situations become urgent or disruptive.

For healthcare organizations and payers, this earlier visibility also supports better continuity of care, reduced avoidable utilization, and more efficient coordination across the care journey.

HIA’s Approach

At the Health Impact Alliance, we believe that early signals of change are actionable, and that identifying them consistently across the care journey improves outcomes.

That is the foundation of our work through LifelineConnect. By connecting caregivers, home-based signals, and care teams around a shared, continuous view of the individual, we help surface emerging risk earlier, when intervention is still possible. The goal is simple: surface the right signals early enough that care teams can act, families can plan, and older adults can remain independent longer.

Partnering for Safer, Connected Care

The Health Impact Alliance works with healthcare organizations, payers, and senior care networks to close the gap between what happens in the clinic and what happens at home.

Most avoidable hospitalizations do not begin in the hospital. They begin with a missed signal, an unsupported caregiver, or a transition that did not hold. Connecting those moments earlier is where the real opportunity lies.

That is what HIA is building toward: a model where caregivers are informed, care teams are aware, and older adults have the support they need to stay home longer, on their own terms.

Stay Connected with HIA

If your organization is interested in partnering with HIA, we'd welcome the opportunity to discuss. Contact us at partner@healthimpactalliance.com. 

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