The role of biodiversity in regulating zoonotic disease in ecological communities has been broadly referred to as the biodiversity-disease relationship in disease ecology. Whether biodiversity decreases or increases disease risk, known as a dilution or amplification effect respectively, remains unclear. The literature has focused on the strength, generality, nature, and context dependencies that could explain contradictory evidence. We suggest that a continued focus on this approach to resolving the biodiversity-disease debate detracts from a more foundational problem with testing these dilution and amplification hypotheses, in that these hypotheses are not falsifiable as proposed. When tested and interpreted as net effects in a system, these hypotheses do not possess a true null outcome; they are vulnerable to explanations. Specifically, that an empirical null outcome can be explained by multiple processes (i.e., a true null vs. a canceling out of amplification and dilution effects) means that process cannot be inferred from pattern. To remedy this problem, we propose that biodiversity and disease risk can be modeled as latent variables in multivariate causal models to reframe how we understand them and test the relationship between them. We present a case study on Lyme disease (LD) through a systematic review, concluding that testing these net effect hypotheses falls short of providing robust evidence for its underlying mechanisms. While these hypotheses have previously been helpful in conceptualizing this idea of biodiversity as a potentially protective factor for human health, they require further specificity moving forward in order to appropriately test the relationship.