Quote Originally Posted by Kane0 View Post
If you want to disincentivize the whack-a-mole effect a common houserule is +1 exhaustion when you hit 0.

If you want an actual Death Spiral a possibility is 1 Exhaustion when you drop to 75% HP, 2 at 50% and 3 at 25%. Just make sure that this doesn't stack with spells and other effects that influence Exhaustion. It's a fair chunk of extra bookwork though, be warned.

Edit: Another possible death spiral is manipulating prof bonus as you lose HP. For example Half Prof after you're down 1/3 your HP, no prof at 25% HP or less.
Another option is to add a DC (probably Constitution Saving Throw) to prevent Exhaustion -- adds a little uncertainty, and helps to make it so melee combatants (who tend to have decent Con and/or Con S. T. Proficiency) won't be as crippled. The party will generally also end up with spells to remove levels of Exhaustion, in which case they also have a bonus strategic decision to make (is it worth the spell slot to remove a level?). There's also some flexibility here, since you can choose the DC. Maybe you make it based on the damage taken by the last blow, but 15 seems to be a good start (maybe +5 if the last blow was a Crit and you want that to feel more impressive).

One big advantage of using Exhaustion is that even a single failure isn't likely to be that crippling in battle (barring someone whose sole and entire schtick is grappling or shoving): a single level only affects Ability Checks. A second level could be noticeable depending on the character (Speed reduction), and starting at the third level it tends to get more obvious.

Depending on your desired feel, there's also the advantage that not all levels of Exhaustion are immediately wiped out with a single (Long) Rest. Of course, you may also decide you want more ways to remove or temporarily ignore levels of Exhaustion to compensate, if the Characters still go down a lot.