This health economist wants your medical bills

Dan: Hey there–

Vivian Ho is a health economist at Rice University and the Baylor College of Medicine in Houston. And since early 2024, she’s been giving talks at… HR conferences. Which is not a typical gig for an economist.

Vivian Ho: Um, yes. Economists don’t usually do that. We love to go talk at our own conferences.

Dan: But she’s been eager to spread a pretty big message.

Vivian Ho: There’s a potential to save workers, um, you know, and employees a lot of money.

Dan: And a few weeks ago, she sent me an email asking for help with what she’s trying to do: 

She’s wants folks to send her hospital bills for a study she thinks could be part of saving people a lot of moneys. She wondered if I’d encourage people to pitch in.

And honestly, I wanted to say yes before I even really knew anything specific about the study.

I should say: Vivian Ho has been a donor to this show. That’s actually how I met her and learned about her work. And became kind of a fan. 

Over the last few years, she’s been digging up and publishing evidence we need, to push back against the way health care keeps getting more and more expensive.

This is stuff a lot of us suspected, to say the least — stuff reporters have documented examples of — but she’s demonstrated they’re actual trends, not one-offs. 

For instance: When nonprofit hospitals make big profits — and they often do – they call them surpluses– they don’t generally use that money to help patients, by giving more charity care to reduce people’s bills. 

In one study, she compared hospital finances in the early 2010s and near the end of the decade. As the decade was ending, she found nonprofit hospitals were a LOT more profitable than they’d been before. 

And they’d gotten a lot richer, with like seventy percent more cash in the bank than they’d had earlier.  

But they were actually giving out less charity care.  

 She told me she ran that down after she got help understanding a big set of data that helped her see what hospitals actually do with their money– and started to poke around in it.

Vivian Ho: I say, well, I’m just gonna go have a look at, you know, one of the local hospitals and see what it says and then I pull it up and I go, oh wow.

Dan: She took a peek at one hospital’s “fund balance” — that’s non-profit speak for an institution’s savings, like for a rainy day. 

Vivian Ho: The fund balance for one of the hospitals across the street from Rice University is five and a half billion dollars. And so, you know, then it’s like, well, I need to take a closer look at this.

Dan: Here’s a couple things she found: That fund balance — the “rainy day fund” — was enough to run the hospital for more than two years. And it runs a healthy profit margin. 

And her study showed when she zoomed out: This is not a one-off. Among hospitals that do well, it’s the norm.

And this kind of data — this kind of EVIDENCE of how things work, of who benefits, and how much, from the totally unfair and unaffordable prices we’re all up against — it’s ammunition. 

Vivian Ho is looking for people to share their hospital bills with her, in order to build up her arsenal of information . 

She’s got a strategy in mind for how to deploy that information to save a lot of people a ton of money. It’s interesting.

And: I have no idea if this specific strategy will pay off.

But here’s what I do think: ?If we’re going to fight against the greed and exploitation that make our health care system so unhealthy — so deadly — we’re gonna need all the fighting power we can get.

So, I’ve sent Vivian Ho a hospital bill. And at the end of this episode I’ll encourage you to do the same. 

This is An Arm and a Leg — a show about why health care costs so freaking much, and what we can maybe do about it. I’m Dan Weissmann. I’m a reporter, and I like a challenge. So the job we’ve chosen here is to take one of the most enraging, terrifying, depressing parts of American life, and bring you a show that’s entertaining, empowering and useful.

Dan: Vivian Ho has been a health economist for like 40 years. And you could say she has mixed feelings.

Vivian Ho: Health economists, they work on so many different things and they are all important and interesting. But I do think the issue of the cost of healthcare and the cost of health insurance premiums is the biggest problem putting a burden on the average American citizen. And I don’t think as a profession that we spend enough time on that basic issue. I feel kind of – well, it does make me quite sad because here I am, I’ve worked in this career for this entire time, and things aren’t getting better. They’re actually getting much worse.

Dan: And that, she says, is why she does things like go to HR conferences these days. She’s got the motivation and she’s got the freedom to do it. 

Vivian Ho: So I’m super lucky. I’ve got tenure at Rice and you know, I’m a member of National Academy of Medicine. I’ve sort of achieved everything that I wanted to achieve, and now it’s, it’s all about, well, what can we do?

Dan: She’s decided to go after what she now sees as the biggest problem. Not the ONLY problem, but the biggest driver in prices that only seem to go up more every year.

Hospital systems are consolidating — gobbling each other up. So they get more bargaining power with insurers. They get higher prices without necessarily delivering more value.

Which isn’t what economists always expect. Bigger can mean better, more efficient. That’s what Vivian Ho used to expect.

Vivian Ho: I started this whole research agenda sort of 10-15 years ago, and I thought bigger was going to be better. I thought because of economies of scale and that if you allowed hospitals to acquire physician practices, there would be less duplication of services, you’d save money. But then the problem is there’s no mechanism that forces a provider to pass any savings onto the consumer. So there may be economies of scale, it’s just you and I as consumers aren’t able to enjoy any of those benefits.

Dan: That’s something we’ve talked about on this show. Like a lot. But what Vivian Ho has been able to demonstrate is: At this point, the average profit margins for hospitals — including “non-profit” hospitals — are actually higher than average profit margins for insurance companies.

Vivian Ho: There’s plenty of rural hospitals and smaller hospitals that lose money, but net, when you average on just how much profits the consolidated systems are making and you add them up all over the country, it’s much higher than what you get for the total profits of insurers.

Dan: Which isn’t to say that insurance companies don’t have a BIG role to play in our suffering. 

Vivian Ho: Insurers are, in many ways, not doing what they should be for customers. Certainly the show demonstrates that in many ways and that they are earning high profits. I’ve just looked at the data and concluded that the hospitals are earning much higher profits than the insurers are, and that’s where we’ve gotta focus our attention. 

Dan: I mean, there’s so much to unpack there, right? One is, wow, the hospitals are earning higher profits than insurance companies, and the insurance companies, by and large, are publicly traded entities that answer to shareholders. And the majority of hospitals in the United States are, as far as the IRS is concerned not-for-profit entities.

Vivian Ho: Exactly. We’ve been doing research lately that unfortunately shows that our not-for-profit hospitals behave a lot like for-profit companies.

Dan: So, okay, how do we get at that? 

Vivian Ho: Oh, uh, how do we change the behavior of what’s going on? 

Dan: Yeah.

Vivian Ho: Yeah. So…

Dan: Here’s Vivian Ho’s game plan. It’s complicated, and I’m not in a position to say, “this’ll totally work” — but there’s a lot that’s worth knowing here.

Especially this:

When Vivian Ho talks to business executives or HR managers, she brings out another set of data. And this is data that’s only become available in the last few years. 

Insurers now have to show what they pay hospitals. Not the sticker price, the negotiated price.

So, Vivian Ho’s talk includes a slide showing some details from three Houston hospitals. Blue Cross pays one of them about 22 thousand dollars for spinal fusion surgery. Another one gets 66 thousand — three times as much.. 

And the slide shows: That math is similar for other procedures. 

Vivian Ho: Employers didn’t realize how different the prices could be at their local hospitals. They thought, you know, anyone would think, oh, the prices couldn’t be that different. And now that some of the data is starting to make it out there, it’s becoming clear you really could save a lot of money.

Dan: I mean, you MAYBE could — if you could give your workers a good reason to go to the hospital that charges less.

Vivian Ho has a model for how that could work. It’s — based in part on a story I call Once Upon a Time in Massachusetts. 

That’s next.

This episode of An Arm and a Leg is produced in partnership with KFF Health News. They’re a nonprofit newsroom covering health issues in America. Their reporters do amazing work. They win all kinds of awards every year. We’re honored to work with them. 

So, here’s our story — Once Upon a Time in Massachusetts — straight from the story’s author.

Elena Prager: I am Elena Prager. I’m an assistant professor of economics at the Simon Business School at the University of Rochester.

Dan: And while doing her dissertation, she came across a very unusual set of data. 

Elena Prager: I was like, wow, goldmine.

Dan: Here’s the story: Massachusetts has an agency that basically runs employee health benefits for all state employees, and a lot of local-government workers too.

And once upon a time — starting in 2010– they tried something unusual. 

Elena Prager: Possibly because they were lucky, possibly because they were smart, they designed their health insurance plans – at least when it came to hospital care – based everything on copays. And what that means is that you are given a dollar number. Let’s say $250 or $500 and like that’s it. That’s the number. If you go to hospital A, you pay 250, you go to hospital B, you pay 500. The end.

Dan: Which is totally different from how we’re used to looking at hospitals, right? I mean, regular insurance plans typically say, “You’ll pay like 10 percent, or 20 percent or 30 percent of whatever the total bill turns out to be.” 

Elena Prager: And the patient is left scratching their head being like, well, how do I know what the total bill is gonna be? Even if the hospital tells me something. Like, what if something goes wrong with the anesthesia? They have to call in an extra specialist. There’s a complication. More stuff gets done. Like it’s very, very hard to, for a patient and even really a provider, to predict in advance what’s gonna be done to them and therefore what the price is going to be.

Dan: So there’s no way for me to take price into account if I need to go to the hospital.

But Once Upon a Time in Massachusetts, there was. It was a co-pay. Whatever insurance plan you were on, it worked the same way:

Go to hospital A — where prices are generally higher — your copay might be five hundred dollars.

Go to hospital B — that charges the insurance plan less for stuff — you’d pay two-fifty.

And Elena Prager found the data that showed what happened next.

Long story short, she found that over three years, patients started using lower-priced hospitals more often. Patients saved money, and so did the health plan. 

And actually, Massachusetts still runs its health plans this way, but– 

 Vivian Ho doesn’t think other employers can just get their insurance companies to adopt this same model. 

VIVIAN HO: It’s actually a fair amount of work.

DAN:  Work for the insurance company. Doing the math to figure out which tier is which, and what the copays would be.

Vivian Ho: and of course it gets the hospitals really upset.

Dan:  The folks in Massachusetts had a ton of leverage that most employers don’t have:  

Elena Prager says they represented a huge chunk of the insurance market like a twelfth of it. Enough business that it was worth insurance companies’ while to put in the work.

But now, Vivian Ho has her eye on a couple of new services that are promising to do something similar.

One is actually a subsidiary of everybody’s favorite insurance company: United Healthcare. They make an app called Surest.

Surest Ad: It’s easy to shop for a vacation rental or your next flight, but when it comes to something like healthcare, not so easy. That’s why Surest is a health plan, designed to be simple with clear upfront costs.

Dan: Here’s how Vivian Ho describes the mechanics of this kind of app.

Vivian Ho: Doctor tells you you need to go get an MRI, you punch an MRI, the app knows where you live, and it says, here’s a list of providers where you can go get an MRI. And then if you go to this particular place, there’s no copay and there’s actually no deductible, and then if you go to this MRI place, well, you know, there’s gonna be a $25 copay or a $50 copay. Yeah. Isn’t that kind of mind blowing?

Dan: I tell her: That sounds like I would want that if I trusted that the place that costs my employer less is, you know, gonna take good care of me.

Vivian Ho: Right. Well that’s why I’m trying to get funding to do an analysis to look at the spending and quality implications of using one of these apps.

Dan: That is: Do people using these apps end up choosing lower-cost providers? AND: Do they get good care when they do?

Vivian Ho wants to study that. But first she needs to study something else. 

Vivian Ho: All of these apps and price shopping applications, they all depend on having the correct data. Now, the insurers are required to disclose this information by federal rules. It is slowly coming out. It’s not all there yet, but no one’s actually looked to see whether it’s accurate.

Dan: Oh.

Vivian Ho: So there’s been a lot of focus on, is the price there or is it not there, but not is it the price that the patient is actually getting billed.

Dan: And this is why Vivian Ho wants our hospital bills. 

Because: Whether or not one particular strategy is gonna pan out, the data itself contains ammunition. One hospital gets paid twice as much as the ones across the street? 

I mean, that’s information I want out in the open, and getting put to use. 

But that information can  only be useful if we know the data is accurate. And right now, there’s no way to know. 

Insurers are publishing big data sets, but how  do we *know* somebody at the insurance company didn’t just go to Chat GPT and say, “Make me a giant spreadsheet with these fields on it?”

Vivian Ho says if she has enough ACTUAL bills — a thousand would be good, three thousand would be great — she can check. 

Actually, even better: She wants your itemized bill and, if she can get it, the paperwork you get from your insurance company about what they paid. The thing that says “This is not a bill.” It’s an “explanation of benefits” — or EOB for short.

And, she recognizes, this isn’t a TINY ask.

Vivian Ho: I realize it’s time consuming. It does, you know, because you gotta sit down. It’s like, what’s my password and log in, and then you’ve gotta, you know, find one of these EOBs.

Dan: Oh, and you’ve gotta cover up all your personally identifying information.

Vivian Ho: We don’t wanna see your your name and address and so, you know, it takes time to you, you can sort of print these out and use a Sharpie and cross them out.

Dan: It does sound like a huge drag, but I’m here to tell you: I did it. And it took me maybe five minutes.

I don’t know how Vivian Ho’s specific strategy will play out, and honestly, neither does she.

Vivian Ho: You know, I am going at this at sort of like many different angles.

Dan: Yeah.

Vivian Ho: So just trying to raise people’s awareness of there are huge price differences. This is, this is what it takes to address the issue. 

Dan: If you’ve gotten a hospital bill in the last year or so, and you’ve got five minutes — maybe set a note on your calendar for when you DO have five minutes? — I’d love it if you gave this a shot. 

Grab a sharpie, fire up your printer, dig up your login. Print out a bill and an EOB, scratch out your identifying information, take a picture on your phone — wow, this is sounding long, but honestly, it took me five minutes — so do those things, and send the images to pricecheck@rice.edu. 

Vivian Ho’s got researchers standing by.

Coming up on this show: We’re gonna take some time as the year ends, to look at some things that DIDN’T suck in 2025. 

Which basically means: Places where state governments stepped in to protect us from ripoff prices. Which, it turns out, happened! 

News archive 1: Oregonians burdened by medical bills may soon get a break on their credit scores.

News archive 2: New law aimed at protecting Maine consumers from the impacts of medical debt goes into effect.

News archive 3: Tonight Indiana governor Mike Braun signs 10 health care-related bills into law.

Dan: Happened enough that it’ll take more than just one episode to give you a good sample.

That’s next time on An Arm and a Leg.

Till then, take care of yourself. 

This episode of An Arm and a Leg was produced by me, Dan Weissmann, with help from Emily Pisacreta — and edited by Ellen Weiss. Adam Raymonda is our audio wizard.

Our music is by Dave Weiner and Blue Dot Sessions. Bea Bosco is our consulting director of operations. 

An Arm and a Leg is produced in partnership with KFF Health News. That’s a national newsroom producing in-depth journalism about health issues in America and a core program at KFF, an independent source of health policy research, polling, and journalism.

 Zach Dyer is senior audio producer at KFF Health News. He’s editorial liaison to this show.

An Arm and a Leg is distributed by KUOW, Seattle’s NPR news station.

And thanks to the Institute for Nonprofit News for serving as our fiscal sponsor.

They allow us to accept tax-exempt donations. You can learn more about INN at INN.org.

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