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A ‘game of chicken’ in North Carolina? Doesn’t look like fun to us

A recent article in WUNC North Carolina Public Radio calls a contract dispute between WakeMed and UnitedHealthcare ‘a game of chicken.’ But is this a fair fight?

Like a schoolyard bully, it seems big health insurers love to punch down.

Instead of picking on someone their own size (although, for UnitedHealth Group, that’s a small list), health plans frequently go to bat with hospitals, despite the total dissonance in scale.

Exhibit A: North Carolina health system WakeMed and UnitedHealthcare (United).

According to a May 5th article from WUNC North Carolina Public Radio, their dispute over reimbursements could affect the coverage of thousands of North Carolinians.

Why the contract squabble? As usual, the insurer maintains the hospital is just too darn expensive. The hospital, meanwhile, says United is improperly denying claims.

According to a WakeMed statement, “UnitedHealthcare denied reimbursement for medical care to WakeMed patients significantly more than any other insurance company, meaning UnitedHealthcare believes they have the right to determine the necessity of your medical care. We disagree.”

As the WUNC article notes, these fights can, and often do, extend until the 11th hour, as patients and providers alike worry about who will be in network when the clock strikes midnight. Here, if negotiations fail, close to 20,000 members within the United network could lose coverage starting June 1.

But the article goes on – calling the situation “a game of chicken” between the insurer, out to cut rates, and the hospital, hoping to preserve its financial stability. (A fair concern, , given some hospital maternity wards are delivering babies in the red).

So is this a fair fight? As a nonprofit health system, WakeMed saw revenues over expenses of $135M in 2021. While this might seem like a lot, this is a health system with nearly 1,000 beds that discharged more than 50,000 patients, delivered more than 8,000 babies, and saw almost 280,000 emergency room visits. This is a big operation – and proof that, despite what insurers say, running a hospital has quite a bit of overhead.

Even as a big hospital, WakeMed is dwarfed by United, which earned $17.3 billion in profit in 2021. (That’s 128 times as much money as WakeMed.) According to the article, United “is a major player in the North Carolina health insurance market with…a market share of nearly 20% in the state.” The insurer plays like their attempt to cut costs is for the benefit of consumers, but from where we stand, it looks like a for-profit company looking out for shareholders.

So, a chicken fight? Maybe. But up against a nonprofit health system like WakeMed, United sure looks like a teenager picking on a toddler.

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