Whether it’s saber rattling, scare tactics or a side effect of the health care reform law, the public dispute between health care giants UPMC and Highmark is troubling — and deserving of public and regulatory attention.

Highmark, the region’s dominant health insurance company, and UPMC, the area’s dominant hospital chain and physician network, say chances are slim that they will renew their 10-year rate-setting contract. They warn that failure to reach a new agreement will mean hundreds of thousands of Highmark customers will have to pay higher, out-of-network fees to see their regular doctors.

This high-stakes standoff threatens to make health care for many people in this region more of a headache than ever.

This bitter dispute between UPMC and Highmark echoes the contentious process leading up to the current 10-year agreement. But a decade ago, the tough talk was more broadly seen to be part of the negotiation process. This year, UMPC says it’s different. The massive hospital and physician practice network, which also sells health insurance, is upset that Highmark reportedly is rumored to be considering the purchase of West Penn Allegheny Health System.

If Highmark would take over a hospital system, it would become a mirror image of UPMC. It would become a big insurance company that also has a network of doctors and hospitals to provide care.

UPMC is a network of hospitals and doctors that also sells health insurance.

Whether the dispute is fueled, as some suggest, by the egos of UPMC or Highmark CEOs or by concerns over the future implications of ObamaCare, the stalemate is a threat to patients as well as employers large and small in the region.

At a meeting in Pittsburgh sponsored by a business group focused on health care in the region, UPMC and Highmark offered little hope of reaching an agreement. Even companies as large as — and presumably as influential as — Westinghouse Electric Co. are frustrated by bluster and threats. Cheryl Melinchak, benefits director at Westinghouse, said, “There’s a need for them to get back to talking to one another.”

Both Highmark and UMPC are large and profitable nonprofit organizations. Together they dominate the health care industry in Western Pennsylvania, and their power and influence are hard to overestimate.

As nonprofit corporations, they have an obligation to serve the public good. By threatening to disrupt the health care of hundreds of thousands of people and causing Highmark customers to pay more to see their regular UPMC-affiliated doctor, the hospital giant is not serving the public good. The threat this dispute poses to the public and many employers in the area suggests that state officials might have a role to play.

In 2010, Highmark recorded $14.6 billion in revenue, while UPMC did $8 billion in business. The levels of profits and financial reserves of these two giants, as well as the impact their expansion activities have on taking properties off the tax rolls, have raised questions before. Their size and power suggest that a new category, and new rules, for nonprofits is necessary.

Why does UPMC see Highmark providing health care as a deal-breaker for a contract renewal? UPMC should be willing and able to compete with health care services provided by Highmark in the future.

In recent weeks, UPMC signed contracts with health insurers Aetna, Cigna and United HealthCare, suggesting it believes competition in the health insurance market is good. Yet, it threatens to drop an agreement with Highmark if that company brings more competition into health care services.

Almost no one outside the executive suites at UPMC believes that less competition in health care is good for this community.

The general public, corporate leaders in Pittsburgh and state officials, including lawmakers and insurance regulators, should be involved in this dispute to ensure that the public is not harmed by these two nonprofit giants playing a high-stakes game of chicken.