Combine potatoes, onion, ham and water in stockpot. Bring to boil, then cook over med heat until potatoes are tender. (About 10-15 minutes)

Stir in chicken bouillon, salt, and pepper.

In separate saucepan, melt butter over low heat. Whisk in flour and cook until thick (about 1 min). Stir in milk and continue to heat until thick (about 4-5 minutes)

Stir milk / butter / flour mixture into stockpot. Cook until heated through.