University of Michigan Health is acquiring Lansing-based Sparrow Health System, the largest hospital system in mid-Michigan with six campuses in Charlotte, Ionia, St. John’s, Carson City and Lansing, with 500 primary care providers and specialists.
The deal was approved by the University of Michigan Board of Regents on Thursday. Sparrow Health System’s board of directors signed the agreement in late November.
Pending regulatory approvals, the acquisition is expected to be completed in the first half of 2023.
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UM Health spends $800 million
“This agreement strengthens UM Health’s ability to provide quality health care to communities outside of Southeast Michigan, expanding our mission as a statewide referral site for the most critically ill,” Board of Regents Chairman Paul Brown said in a statement.
As part of the arrangement, Ann Arbor-based UM Health will spend $800 million over the next eight years on Sparrow’s hospital campus, funding facility projects, operations and other “strategic investments.”
Those include renovations to the neonatal intensive care unit at EW Sparrow Hospital in Lansing and upgrades to cardiology, oncology, orthopedics and neuroscience services, Joseph Ruth, executive vice president and COO of Sparrow Health System, said in a statement.
“This spur of investment in Sparrow Services will provide job growth and career development opportunities that would not otherwise be available to our caregivers,” Ruth said.
UM Health’s expanding footprint
The agreement includes Sparrow’s Physicians Health Plan, an insurance plan that provides coverage to more than 70,000 members and 300 employers across the state, as well as the Medicare Advantage plan.
It was unclear Thursday whether Sparrow will keep its name or change its name as part of the deal.
“In the coming year, we expect to introduce a strategic update to the Sparrow brand to properly reflect the relationship between our organizations,” said UM Health spokeswoman Mary Mason.
With the addition of Sparrow, UM Health will become a $7 billion institution with more than 200 care sites across the state, including its flagship university hospital, CS Mott Children’s Hospital, Von Voigtlander Women’s Hospital, Frankel Cardiovascular Center, Kellogg Eye Center, UM. Health West and Rogel Cancer Center.
“For University of Michigan Health, this is an important step toward our long-term vision of a statewide system of highly integrated care; A vision that Sparrow also embraces and is excited to build towards,” Dr. Marshall S. said Runge, CEO of Michigan Medicine, dean of the UM Medical School and executive vice president for medical affairs at the University of Michigan.
“Upon closing, UM Health will create a clinical care network that builds on the strengths of the world-class UM academic medical center and highly successful community-based health system. Together, the two organizations will focus on bringing increased health care innovation to mid-Michigan and beyond.”
This is the latest in a series of recent acquisitions and mergers among Michigan hospitals over the past year.
In January, the former Beaumont Health and Spectrum Health Systems combined in a megamerger to form the new Corwell Health, the state’s largest health system with 22 hospitals and more than 60,000 employees.
And the former North Ottawa Community Health System, based in Grand Haven, was acquired by Trinity Health in October. It becomes Livonia-based Trinity’s ninth Michigan hospital.
Contact Kristen Shamus: [email protected] Follow him on Twitter @kristenhamus. Subscribe to Free Press.