EP466: What Is Rising Faster, Insurance Premiums or Hospital Prices? With Vivian Ho, PhD

Episode Transcript
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(00:00):
Episode 466.
"What is Rising Faster, InsurancePremiums or Hospital Prices?"
Today I speak with Vivian Ho.
American Healthcare Entrepreneurs andExecutives You Want to Know, Talking.

(00:25):
Relentlessly Seeking Value.
This episode has three chapters.
Each one answers a key questionand bottom line, it all adds up to
action steps directly and indirectlyfor many, including plan sponsors
probably, community leaders, andalso hospital boards of directors.
Here's the three chapters in some.

(00:46):
Chapter one, are commercialinsurance premiums rising
faster than the inflation rate?
And if so, is the employee portion ofthose premiums also rising, meaning a
double whammy for employees paychecks,i.e. premium costs are getting bigger
and bigger in an absolute sense,and also employees relative share of

(01:08):
those bigger costs is also bigger.
Spoiler alert, yes and yes.
Chapter 2.
What is the biggest reasonfor these premium increases?
Like, if you look at the driversof cost that underpin those rising
premiums, what costs a lot that ismaking these premiums cost a lot?

(01:30):
Spoiler alert, it's hospitals, andthe price increases at hospitals.
And just in case anyone is wondering,this isn't, Oh, charge masters went up
or some kind of other tangential factor.
We're talking about the revenue thathospitals are taking on services
delivered has gone up and gone upway higher than the inflation rate.
In fact, hospital costs havegone up over double the amount

(01:54):
that premiums have gone up.
Wait, what?
That's a fact that Dr. Vivian Ho saidtoday that through my brain for a loop,
hospital costs have gone up over doublethe amount that premiums have gone up.
Chapter 3.
Is the reason that hospital priceshave rocketed up as they have
because the underlying costs thesehospitals face are also going up

(02:17):
way higher than the inflation rate.
Like, for example, our nurses salariesskyrocketing and doctors are getting
paid a lot more than the inflation rate.
Stuff like this.
Too many eggs in the cafeteria.
Way more charity care.
Bottom line, is an increasein underlying costs the reason
for rising hospital prices?
Spoiler alert, no.
No to all of the above.

(02:38):
And I get into this deeplywith Dr. Vivian Ho today.
But before I do, I do just wantto state with three underlines,
not all hospitals are the same.
But yeah, you have many major consolidatedhospitals crying about their, you know,
in air quotes, razor thin margins,who are, it turns out incentivizing
their c-suites to do things thatultimately wind up raising prices.

(03:01):
I saw a PowerPoint flying around.
You may have seen it too.
That was apparently presented bya nonprofit hospital at JP Morgan,
and it showed this nonprofit hospitalwith a 15.1 percent EBITDA in 2024.
Not razor thin in my book.
It's a, the boards of directors arestructuring c-suite incentives in ways
that ultimately will raise prices.

(03:22):
If you want to dig in a little deeper onhospital boards and what they may be up to
listen to the show with Dr. Suhas Gondi.
Vivian Ho, PhD, my guest today, is aprofessor and faculty member at Rice
University and Baylor College of Medicine.
Her most major role these days isworking on health policy at Baker
Institute at Rice University.

(03:42):
Her work there is at the national, state,and local levels conducting objective
research that informs policymakerson how to improve healthcare.
Today on the show, ProfessorVivian Ho mentions research with
Salpy Kanimian and Derek Jenkins.
Alright, so just one quick sidebarbefore we get into the show.
There is a lot going onwith hospitals right now.

(04:04):
So before we kick in, let me justmake one really important point.
A hospital's contribution to medicalresearch, like doing cancer clinical
trials, is not the same as how a hospitalserves or overcharges their community or
makes decisions that increase or reducetheir ability to improve the health
and well being of patients and memberswho wind up in or about the hospital.

(04:25):
Huge, consolidated hospitalnetworks can be doing great
things that have great value.
And also at the exact same time, kind ofharmful things clinically and financially
that negatively impact lots of Americansand doing all of that simultaneously.
This is inarguable.
And with that, my name is Stacey Richter.

(04:45):
This podcast is sponsoredby Aventria Health Group.
And here is my conversationwith Vivian Ho, PhD.
Dr. Vivian Ho, welcome toRelentless Health Value.
Thanks so much, Stacey.
I'm thrilled to be here.
You know, I've learned so muchfrom your past shows, both
from you and your prior guests.
I'm thrilled to be talking withan audience that is so informed

(05:05):
about health care and working sohard to improve affordability and
access to high quality health care.
I think we all have a sense thatpremiums are going up in this country
for commercially insured employeesand members of commercial plans.
Would that be correct statement?
Yes, you're absolutelyright about that Stacey.

(05:25):
If you look at the data from 1999 through2023, so close to 25 years, the cumulative
increase in the cost of a family insurancepremium through employer sponsored and
health insurance has risen by 314%.
So that's the cost ofinsuring a family of four.
For combined for both theemployer and the employee.

(05:46):
We have the price to insurea family for an employer and
the employee has gone up 314%.
I mean, is that just the inflationrate that's pretty long time?
No, it's much higherthan the inflation rate.
Over that same time period,workers earnings increased by 111%.
So there is this significant disparitybetween how fast the cost of a worker's

(06:10):
health insurance premium has risencompared to their take home pay.
Right, okay, so we just went up111 percent and the cost of the
insurance goes up 314 percent.
I just saw a LinkedIn post by ByronHugley the other day referencing an
article entitled, "Have Wages Stagnatedfor Decades in the US", which was written

(06:31):
by Michael Strain that corroboratesexactly what you're saying right now.
Dave Chase and others havetalked a lot about this.
Oh, absolutely.
This is a big hit to workers take homepay because that contribution, it turns
out that if you look at the portion ofthe premium that the worker is paying

(06:53):
for, that's actually increased even more.
It's actually increased 326%.
So not only is the cost of theentire insurance premium increasing,
the amount that the workerhas to pay for is even higher.
And then these costs don't even take intoaccount the amount the worker pays once
they actually start going to the doctor.

(07:13):
So we know over time, deductibleshave risen, copays have risen.
So, this is a tremendous burdenupon most American workers.
Just the cost shifting, the memberis paying of the premium has gone up
substantially, as you just said, whichdoesn't even include the amount they're
paying after the premium is said and done.

(07:35):
Like, for example, when they go tothe doctor and get hit with some
additional portion of the spend.
Over time, what the worker is seeing isless and less of their paycheck coming
home in terms of cash and more goingtowards paying for the health insurance,
I almost wonder when people are talkingabout how difficult insurance has been in
terms of being able to pay for groceriesand other items, that it's actually behind

(08:00):
the scenes become even worse because theyforget the part that was already taken
out of their paycheck to cover healthcare.
Zach Cooper, I just saw him speakand he said, and this comes out of
KFF, a family premium in 2025 issomething like $25,500 on average,
which is more than a car, right?

(08:20):
Like you can buy a decent car,brand new, drive it off the
lot for less than $25,500.
Curse the insurance companies.
Is that where we're at?
Well, I realize when I've beenshowing this graph in public
presentations, that that's exactlywhat the audience would say.
Those darn insurers, they'retaking home huge profits and we've
got to do something about it.

(08:41):
But, you know, it doesn't tellthe entire story because health
insurance premiums have to cover thecost of the underlying health care.
And so we've been lookingfurther at this particular issue.
And, you know, I actually have cometo the conclusion that a lot of the
increase in the rise of health insurancepremiums is due to the rise in the

(09:02):
underlying cost of hospital care.
Just to back up for a sec. So thegraph that you're talking about is
this, and we can put it in the shownotes, it's this crazy looking thing
where you show that the cost to insurepopulations of employees and families.
It just is this spike.
It's just this yellow linegoes straight up in the air.

(09:23):
The point that you're making is, isthis insurers taking in massive profits?
Uh, maybe, but if you look a little bitdeeper, underlying costs are a factor
here and you just drop the hospital word.
Do you want to dig ina little bit on that?
Because what I'm inferring from whatyou're saying is that hospitals are
potentially a component of theseunderlying costs, which then wind up

(09:46):
driving premiums for insured Americans.
Sure.
So, with the help of Salpy Kanimian, oneof my graduate students, we went to look
at Bureau of Labor Statistics data to lookat increases in prices of the underlying
services that are included in healthinsurance premiums, specifically, we

(10:07):
look for increases in prices for hospitalservices, physician services, and then
also the price index for health insurance.
We just had this conversation abouthow much premiums have gone up was like
314%, which is way higher than inflation.
And if we're thinking here about,okay, well, maybe this is driven

(10:29):
by hospital prices as you andyour team started to conclude.
Is there a smoking gun here?
Like, how are we figuring out oneof these things leads to the other?
That there's like somecausation that's afoot.
When we're looking at prices, theBureau of Labor Statistics doesn't
provide continuous data back to1999, but we can start in 2006.

(10:51):
And so if we say, let's set an indexin 2006 for hospital, physician,
and insurance prices at 100.
And then look how they'veincreased through 2023.
That's just under 20 years.
The price index for hospitalservices goes from 100 up to 184.
Over that same time period, if youlook at the price index for physician

(11:12):
services and insurance, the price indicesgo up by 138 and 128 respectively.
So the price index for hospital carehas risen substantially over time.
It's risen for physicianservices and insurance, but
not by as much, not even close.
Okay.
So over the time period that we'retalking about from starting in 2006,

(11:36):
because as you said, you can't getdata on hospital prices prior to 2006
or the kind that you're looking for.
So from 2006 forward we've got an84 increase on hospital prices.
Meanwhile, it's only 38 fordoctors and only 28 for insurance.
Yes.
Which is weird and striking.

(11:57):
Like my head is a twirl right now.
Just, just to hear this, that we've gothospital prices that are going up double,
more than double the other two factors.
And, and I think this is what you alwaystalk about, economists are looking
at the entire healthcare system, nottrying to find some silo villain in

(12:20):
a way that, as we all know, peoplewho listen to this show, that it is
definitely a healthcare system that itwas perverse incentives and complexity
and, there's actions and reactions.
So you kind of got to lookat things systemically.
And it's very striking to me to hearthat hospital prices have gone up
so much relative to other services.

(12:41):
Economists, they really dolike to focus on the basics.
So when we talk about overallspending, that's price times quantity.
And in this case, we say, well,let's also look at prices.
And it's important to look at thedifferent types of prices and Uwe
Reinhardt years ago wrote thisarticle, "It's the prices is stupid".
And so it's not just the prices, butthe prices for what types of services.

(13:01):
Got it.
The types of services thatwe're talking about are hospital
services, not necessarily a servicewhich a doctor is doing and then
specifically getting paid for.
Oh, absolutely right.
We're talking about the price that aninsurer is negotiating with a hospital
to provide care to an employee.
And this makes sense to me.
I saw at the Winter HBCH Houston BusinessCoalition on Health meeting, employers

(13:27):
were asked, there's a poll questionand employers were asked, what do you
feel poses the greatest threat to theviability and success of your health plan?
Winner by a mile,hospital inpatient costs.
Which is not surprising if youstart digging in to the percentage
of any given plan sponsorspend attributed to hospitals.

(13:48):
For example, Marilyn Bartlett was onthe show, I think she said something
like 45 to 50 percent of the spendin Montana was directly attributable
to hospitals, with a huge chunk ofthat being acute care hospitals.
Cora Opsahl and Claire Brockbank wereon the show saying something similar.
I just had a conversation with ShawnGremminger the other day who asked

(14:09):
around and he said that most plansponsors will attribute about 50%.
So half of their entirespend is going to hospitals.
The National Alliance has a report that'svery interesting on or about these topics.
But the percentage of plan sponsorspend may actually be even more than
50 percent because a lot of timesthose numbers don't count buy in bill.

(14:31):
It doesn't count, you know, patientor member gets a drug infused and
then the hospital could mark it up.
There's a show with AutumnYoung Chu and Eric Davis.
Hospitals sometimes mark up the cost ofthe drug three to five times or sometimes
even as much as 10 times the cost.
And so that 50 percent numberdoesn't even include stuff like that.
So this is this is kind of makingsense that if you've got the prices

(14:52):
that are going up by a factor of 84more than double everything else,
if one aspect is going up double thepercentage or the number of points
of everything else, then it's goingto become a bigger chunk of the pie.
So I mean, this is kind of corroborativeif we start thinking about it.
And it's consistent with the anecdotesthat we're hearing about medical debt.

(15:13):
And in consumer bankruptcy.
Most of the stories that I hearabout health bills being the
leading cause of personal bankruptcytend to be hospital bills.
So everything is, as you said,consistent with the picture that
we're hearing about from the public.
If I'm thinking about the whyhere, like, okay, so we've got
skyrocketing hospital prices.
And if you look at that graph, itlooks pretty skyrocketing, frankly.

(15:37):
Is it because underlying hospitalcosts have gone up so much that
you read press releases, razor thinoperating margin, like that's the go to
phrase, razor thin operating margins.
So if we're thinking about theseskyrocketing hospital prices, there's a
lot of underlying costs for hospitals.
We've heard about escalating thesetravel nurses, we've heard about the

(16:00):
issues with drug shortages, and then theprices go up, and Martin Shkreli, and,
you know, like, there's a lot of thingsthat conceivably the hospital themselves
has to deal with the inflation rate.
Are we seeing that the underlyingcosts of everything are escalating
at, you know, have gone from 100 to184 as well, leaving the hospitals
with this razor thin operating margin?

(16:22):
Is that an explanation here?
No.
That was pretty much underlined.
So first of all, if one looks atthe increase in wages over time,
as we already talked about over thelast 25 years, workers earnings have
increased 111 percent and a portionof that, you know, in there is nurses
wages and other healthcare workers.
So we know that earnings havenot kept up with the cost of

(16:43):
the family insurance premium.
And we've talked about the risinghospital prices being higher
than for physician services.
So we know that physiciansearnings aren't increasing as much.
But not only that, we actually, inour study, we took a closer look at
the net profit margins of nonprofitand for profit hospitals and
compared them to insurance companies.

(17:05):
This is what we were able to do withour collaboration with Marilyn Bartlett
and the NASHP Hospital Cost Tool.
And if you look over time, in every year,the net profit margins for insurers are
actually lower than either the non profitor for profit hospitals, except for 2022.
And there's actually other researchshowing for many large consolidated

(17:27):
non profit hospital systems, theirnet profit margins were lower in
22 because of their investmentportfolio, not because of anything
going on the healthcare delivery side.
Well, wait, wait, I just need to stop you.
So you're saying that theprofit for hospitals, is higher
than the profit for insurers.
Yes.
The profit for hospitals is higherthan for insurers and actually anybody

(17:50):
can check this online because if youGoogle you can look at sort of the
total profit for insurers for 2023 andyou'll get a report from the National
Association of Insurance Commissionersand they'll say it was $25 billion total.
And then if you look at the mostrecent version of the hospital
cost tool and you download it.
It's free.

(18:10):
And you can sum up the operating profitsacross all the hospitals in the sample.
And we've just updated the dataand for 2023, fiscal year 2023,
it's slightly different in terms ofmonths, but it sums to $205 billion.
So and that's in total.
And I do just want to state forthe record here that not all

(18:31):
hospital systems are the same.
There are, in fact, hospital systemsthat actually do have razor thin
operating margins and I think that'sreally important and there are some
amazing people, I talk to people allthe time who are so mission driven
that work at hospitals, right.
So I really just want to highlightin six colors that we're certainly
not talking about all hospitals andwe're certainly not talking about

(18:52):
all people who work at hospitals.
So the hospital profits in totalin 2023, 205 billion dollars.
Yeah, we're talking abouthospitals $205 billion versus
insurance companies $25 billion.
I'm trying to figure out a way torationalize this and also try to
get a bead on the pushback here.
So, so, let me think this through.

(19:14):
A, there's a lot more hospitals thaninsurers that could play a role here.
Additionally, we haveespecially nonprofit hospitals,
if you overhear or hear a retelling ofa hospital conversation with a local
employer or read the press release, Imean, they will say that we've got a cost
shift to you commercial insurers in orderto pick up all of the charitable care
and the cost of uninsured or underinsuredor Medicaid's not paying us enough.

(19:37):
So like we have to cover those costs.
So like that couldcertainly be a chunk there.
And then you had also said we're takinglosses in our investment portfolio.
So I guess, I don't know if that'sstated outright, but like what is
the pushback that the hospitalsgive, I guess is probably a
summary of this entire question.
And how do you respond?
Hospitals will respond, they'reproviding benefits to the community

(19:58):
with those profits that they're earning.
But we did another paper with theNASHP hospital cost tool data.
We looked at the periodbetween 2012 and 2019.
There was an increase in profitsfor hospitals over that time period.
And we looked at how much wenttowards charity care, and how much
went towards the fund balance.

(20:18):
Or, you know, you, I'm working at auniversity, it's the equivalent kind of
an endowment for a healthcare system.
And what we found over this period, it'sclose to a decade, we found there was
no statistically significant increasein annual charity care for hospitals
that was provided over that period.
But there was well over a dollar.
More than a dollar 50 in eachdollar increase in profit actually

(20:42):
went towards their fund balancetowards their own endowment.
So, I just don't buy that the profitsare actually going back to the community.
And there's plenty of work that'sbeen done by Ge Bai and other
researchers showing the amountof charity care provided by these
healthcare systems is nothing comparedto the tax breaks that they're

(21:03):
actually receiving from the federalgovernment as non profit hospitals.
Yeah, and you do see hospitalspushing back on the NASHP analysis.
And if anyone is reallyinterested, you should look up the
pushback because it does exist.
Personally, I see it asa philosophical pushback.
There's kind of like broadstroke statements, like we
disagree with this math.
But then if you start asking alot of questions about what is

(21:24):
disagreed with, like, that's wherethe talk track starts to falter.
But if anyone has read anything thatthey feel is really compelling, as
far as a pushback with actual, youknow, like column A and column B,
and this is exactly what's different,I would be very interested to see
it because I have not as of yet.
I just, it's more of apublic relations pushback

(21:45):
I will also say, interestingly, justcoming out of JP Morgan, there is a
chart going around from Advent Healththat show, which is a nonprofit, and
they had a 15.1 percent EBITDA in 2024,which is a lot different than the razor.
I would not consider a 15.1 percentEBITDA as a razor thin operating margin.

(22:08):
And that was a chart, I believethat was presented by the
hospital themselves at JPM.
So correct me if I'm wrong, anybody, butlike, again, I think most businesses would
be thrilled to have a 15.1 percent EBITDA.
Yeah, so there will be criticisms,particularly from the American Hospital
Association, about these numbers.
But they come from the datathat these hospitals submitted

(22:32):
to Medicare cost reports.
So how can they on one hand say, yes,use this data to determine how much
you should raise our reimbursementsfor Medicare in the future, but
then say, don't trust the data?
It doesn't make sense to me.
Yeah, this seems to be a bitof a contradictory statement.
But why is this?
You know, like we're here weare having conversations about

(22:52):
nonprofit health systems.
Why does this happen?
These are institutions.
If they're nonprofit, they aretaking tax breaks because they
are positioned and have been inthe past pillars of the community
serving the community and really,really important ways and still do.
Right, like I don't want to diminishthe role that hospitals play here

(23:14):
and the people who work there.
But, how does it happen that we're in aplace where we have a hospital systems
that are making so much money that they'reable to fund their endowments while at the
same time saying that there's razor thinoperating, like, how does this happen?
So, we received funding from ArnoldVentures to analyze the NASHP hospital

(23:37):
cost tool data and we linked it upwith IRS 990 reports that contain the
compensation of CEOs of hospitals.
And we didn't know whatwe were going to find.
We just wanted to look at whatare the factors that are most
associated with high CEO pay.
I've been working with a terrificpostdoctoral scholar, Derek Jenkins.

(23:57):
And what we found, again, overthe period 2012 to 2019, CEO pay
increased, the mean pay increasedfrom 1 to 1.3 million dollars.
But what was most important wasthe factors that were most likely
to explain higher increase in pay.
So the CEOs that got the highest raiseswere the ones that increase the profits

(24:21):
of their health care system the mostand also increase the bed size, the
number of beds under their control,whether that was hospitals getting
bigger or them acquiring more hospitals.
So what the data is telling us isthat CEOs, maybe inadvertently, from
their boards, but regardless, arebeing incentivized to consolidate.

(24:43):
And, under that consolidation that givesthem more negotiating power, they can
therefore charge these higher prices thatwe see in the data to more patients.
The point that you're making is thatit's not all just the salary increase.
It's the incentives.
So CEOs are accountable tothe boards of the hospital.
And what you've found when youstart digging into the data is the

(25:04):
hospitals that are paying their CEOsthe biggest raises, it's conditional
on performance metrics and what thoseperformance metrics are, are more beds.
And I guess you can buy or you can build.
So one of the fastest ways to getbigger is to acquire other hospitals.
So the CEOs now are incentivized bytheir boards to effectively consolidate.

(25:30):
And we know what that means,long time listeners of the show.
Absolutely.
So, I didn't think this way maybe 10years ago, but then I actually did 10
years of service on a non profit board,actually Harris Health's managed care
organization, Community Health Choice.
And I got put on the governancecommittee, which determines
the compensation for the CEO.

(25:51):
And so I saw it it's actually, youhave this committee and it decides
the criteria under which you'regoing to give the CEO a bonus.
And so the things we looked at, therewas profit in there because you do
have to make sure you don't lose money,otherwise the company goes under.
But the things we were looking atwere quality, measures in terms of
satisfaction by a customer and thenquality measures, you know, the caps,

(26:13):
different quality measures for insurancecompanies, and also satisfaction by
the physicians that you're reimbursing.
And so then it should be the casethat a nonprofit board of a hospital
should be thinking of, I would thinkif they're caring about the community
that they would be caring about how muchcharity care the hospital is providing.
Are they serving the entire community?

(26:35):
Do they care about quality as well?
And you know, we're working onanother study trying to show
there's some association betweenquality and CEO compensation.
But gosh, darn it.
The thing that matters the most isprofits for the hospital and bed size.
Again, as we all know, there's, there'stwo factors I just want to point out here.

(26:55):
It's long been known and there'sa lot of research to this end.
When you consolidate, hospital prices goup, and there's a lot of data to that end.
There's a Zack Cooper study.
There's just so much information thatshows that once consolidation starts to
happen, hospitals start to derive marketpower and hospital prices will, in fact,

(27:16):
go up and consolidated hospitals haveso much higher prices than independent
hospitals for all kinds of reasons.
But like, that's a fact.
So effectively, what we've got is boardsof directors who are incentivizing their
CEOs to figure out how to consolidateand I guess this is not that striking.
I'm thinking back to the show with SuhasGondi, Dr. Suhas Gondi, who they did

(27:39):
a bunch of research and found that theprofession with the biggest representation
on a lot of these hospital boards isdun dun dun, finance professionals.
So, I mean, there's like, generallyspeaking, and I'm winging this off
the top of my head, but it's like,there's 1.2 doctors on any given
hospital board and .01 nurses.

(28:00):
There's so few individualswho actually have a clinical
background, mostly it's finance.
So I guess finance is going todo what finance is going to do,
and this sounds very financey.
Yes, it's not only someone with afinance background, but it, you would
think in terms of who wants to be onthese boards, it's going to be a wealthy
member of the community who cares thatwhen, heaven forbid, something terrible

(28:24):
happens to them or their family, thatthey can go to the local hospital and
immediately get the most advanced care,that they're not going to have to fly to
New York City or to one of these othertop places to get that advanced care.
So the only thing going in theirminds, is the financial resources at a
hospital so that it can buy the latest,greatest technology for them without

(28:45):
thinking what are the consequencesfor the entire community if this
care is not affordable to everybody?
That's really interesting.
So what you're saying is who's going tobe on a board is going to be a finance
person who's thinking, Whoa, we got tohave the latest and greatest PET scan,
whatever, with all the bells and whistles.

(29:06):
And we need to have thatin the local hospital.
So we got to make sure that we'respending a whole lot of money
to service that fancy equipment.
Without probably I mean,again, they're finance people,
they're not epidemiologists.
So they may not realize that you'rechances of needing a fancy PET scan
machine are minimal compared to youneeding the best care for chronic

(29:29):
kidney disease or not get MRSAwhile, while in the hospital, right?
Like, if what our main focus is, isbuilding a new building so that we
can put the fancy machines in there.
Resources are a zero sum game, and we'vegot the CEO of the place very, very
focused on making sure that we're justadding this new fancy equipment that
means that attention is necessarilybeing taken from let's make sure

(29:50):
that we have a high quality place.
The more attention that you put onone thing, the less attention as far
as time and energy and money that isgoing to be placed on something else.
Oh, oh, absolutely.
I think the approach that these boardsare taking now is incredibly myopic
because what they are doing, they'reraising the cost of health care for
their own workers because of this.

(30:12):
Mark Cuban, who's been on your show,has said, you know, he, he realizes
things in the design of his benefitactually had been harmful to his
workers and he addressed that.
This is the exact same notion that ifyou are raising the cost for workers this
much, they cannot afford to get adequatehealth care, and it's about protecting the

(30:32):
entire community and keeping the entirecommunity as productive as possible.
So big action step, everybody try.
And it might not be easy to figureout who actually is on the board of
directors at your local hospital,and apprise these folks potentially
of the impact of their actions.
What I'm concerned about is the mostconsolidated systems who are charging

(30:55):
the highest prices are actually makingit hard, harder even for the hospitals
that haven't consolidated to just get by.
And so what I'm worried that is thatthere's this, this disparity resulting
in, in the delivery of healthcare.
But, I couldn't agree with you morein terms of we need more physicians
on boards making decisions.
I'm a cancer survivor, so I actuallymake a lot of visits to specialists.

(31:19):
And every time I go, they find outI'm a health economist and every
single one has a good suggestion onhow to improve healthcare delivery
in their own system and they say,but no one ever listens to me.
I really just want to acknowledge thatit is really hard to run a hospital.
But it just hasn't been a focus of alot of boards in particular to really

(31:43):
contemplate what the impact is topatients of some of these actions.
So yeah, I guess many factors inplay that add up to where we are.
It's extremely hard.
It's just we need to listen to thepeople who actually are experts in making
things better and actually take action.
And yeah, just underlying that, we aretalking about their most consolidated

(32:06):
systems right now, or the ones who aspireto be the most consolidated due to the way
that their boards are for sure thinking.
And you had said when you start toget this momentum for consolidation,
it actually makes it harder tobe an independent hospital for
a bunch of different reasons.
And then you start winding up actuallybecause then the individuals who

(32:29):
are really mission driven that areworking at some of these places
and also seeing what's going on,maybe conflicting with their values.
You wind up with a lotof cognitive dissonance.
It just, it's just a bad scene forall kinds of reasons that I'm sure our
audience can articulate it clearly.
If I was going to ask you to summarizeDr. Vivian Ho, takeaways from
what we just talked about are thethings that you think are the most

(32:49):
important to leave our audience with.
How would you do that?
The cost of health insurance is anenormous burden on working Americans
and it has been getting muchworse over the last several years.
The work that we've done suggests thathigh hospital prices are the main reason
why those premiums are rising so much.
And they've risen faster than forphysician care and for insurance premiums.

(33:13):
Not only that, it's not becauseof high costs for hospitals.
Profits for hospitals have been higherthan those for insurers except for one
year in 2022 for non profit hospitals.
What I'm hoping is this knowledgeactually generates a discussion amongst
the community amongst those who aresitting on hospital boards to try and

(33:34):
think more broadly about what is thetype of health care system we are trying
to achieve and what are we trying toincentivize our hospital leaders to do.
Focus more on affordability.
Yes, you need to deliverhigh quality care.
You need to make positive profits,but create a better, healthier
balance for the cities andcommunities that you're serving.

(33:56):
So that's what's actionable, iswhat you're saying, that this has
to really start at the board level.
Like, the boards really need tobecome more cognizant of exactly
and specifically what they're doing.
... Absolutely.
You know, we do need to have betterhealth policy, but there are certain
things that health policy can't address.
Although, in this case, maybe it couldbe that we have policy that hospitals

(34:17):
are required to disclose the compensationmatrix they use to deliver bonuses at
non profit hospitals, but I think thisdoes need to be something that it's
more a discussion in the healthcaresystem amongst everybody involved
about what we're trying to achieve.
So, boards of directors, this isa whole healthcare ecosystem that
we're talking about here and actionshave reactions the flywheel that's

(34:41):
being created may not actually bethe flywheel that you want to create.
So I think that's thought number one.
And then thought number two, it'dbe important for communities to
potentially figure out even who's onthe board of their local hospital,
which is sometimes really hard becausewith all this consolidation, the
board might be three states away.
And then some of the takeaways fromthe Suhas Gondi podcast if anybody
wants to go back and listen to that,which is like, maybe we should get more

(35:03):
healthcare professionals on some ofthese boards and really start paying
attention to the input and insightsof those who are actually working
in the building, which also came up.
Anything I forgot to ask youthat you wanna mention here?
You know, if I saw all the profitsgoing towards nurses wages, I
just fold up shop and go home.

(35:24):
Yeah.
Just not happening.
Dr. Vivian Ho, if someone isinterested in learning more about your
work, where would you direct them?
Use your search engine, type in VivianHo and Rice University and you'll
find my work and you could also go toGoogle Scholar and type in my name.
Dr. Vivian Ho, thank you so much forbeing on Relentless Health Value today.
Thank you Stacey.

(35:44):
Hi, I'm Dr. Vivian Ho.
I'm a health economist at Rice Universityand Baylor College of Medicine.
I listen to Relentless Health Valuereligiously because this is the
show for those who are part of thetribe that wants to improve the
quality of healthcare, improve accessto care and make it affordable.
So make sure that you subscribe tothe newsletter and subscribe to the

(36:07):
podcast and keep up with every episode.

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