University of Michigan Health acquires Sparrow Health | 7 takeaways

University of Michigan Health has completed its acquisition of Sparrow Health System. The merged system now operates 11 hospitals and 200 sites of care. (Image: U-M Health)

Less than five months after announcing plans to come together, University of Michigan Health and Sparrow Health System say they have joined forces into one organization.

U-M Health completed its acquisition of Sparrow earlier this month. The systems say they have received all of the necessary regulatory approvals and are moving forward.

Here’s a look at some key facts about U-M Health’s acquisition of Sparrow.

• Read more: Two Wisconsin hospital systems are planning to merge

1. A $7 billion organization

With U-M Health’s acquisition of Sparrow, the system says it is now a $7 billion organization. U-M Health now manages 200 care sites across the state of Michigan and 11 hospitals. Sparrow has 120 sites of care, including six hospitals, operating in central Michigan. Sparrow officially joined U-M Health April 1.

“This combination creates a clinical care network that builds upon the strengths of the world-class University of Michigan Health academic medical center and Sparrow’s successful community-based health system,” Paul Brown, chair of the U-M Board of Regents, said in a statement.

• Read more: Expect more hospital mergers and partnerships out of financial necessity

2. Investing $800M in Sparrow

With the agreement, U-M Health says it is investing $800 million into Sparrow over the next eight years. The system says it expands on existing partnerships, including University of Michigan Health at Sparrow Children’s Center and U-M Health’s investment in Sparrow’s health plan, Physicians Health Plan.

“We become part of University of Michigan Health knowing that we have had a successful partnership in the past and have the same vision for the future,” Sparrow Health System Board Chair John Pirich said in a statement. “This enables Sparrow to achieve our long-term strategy of helping to create a statewide system of care while providing world-class care close to home.”

3. Envisioning a statewide system

With the deal, U-MHealth moves closer to offering care all across Michigan, said Marschall Runge, CEO of Michigan Medicine, dean of the University of Michigan Medical School, and the University of Michigan’s executive vice president of medical affairs. U-M Health has primarily served southeast Michigan, but now says it will become a referral site for critically ill patients across the state.

“For University of Michigan Health, this milestone advances our organization’s long-term vision of a statewide system of highly coordinated care,” Runge said in a statement. “The completion of this transaction represents a special moment and, as one team, we are well positioned to unlock new opportunities and share best practices while providing our patients with the highest level of care.”

4. What it means for patients

U-M Health says it aims to expand specialty and complex care, in-person and virtually, to residents in the Lansing area. The system also says it aims to expand healthcare access to patients of historically underserved populations.

More patients can gain access to research trials, the system says.

But Sparrow says patients will continue to receive the same services from their providers and, eventually, access to additional services.

5. What’s in a name?

The systems haven’t announced a name or identity for the combined organization. While U-M Health is bringing Sparrow into the organization, the system says it plans to respect Sparrow’s history.

“While our leaders recognize the importance of unifying the University of Michigan Health and Sparrow brand, it is important to us that we execute the transition of Sparrow branding in a thoughtful manner,” U-M Health said. “While we do expect to transition Sparrow to a brand aligned with University of Michigan Health, we will ensure its legacy is appropriately honored.”

6. Much work remains

Even though U-M Health has finalized the acquisition of Sparrow, the system says leaders will be working over the coming months to fully integrate the two systems. Sparrow CEO James Dover is now reporting to Marschall Runge. U-M Health says interim leaders have been named to manage the integration of the systems.

Executives and physician leaders from U-M Health, Sparrow, and University of Michigan Health-West will be working to bring the systems together and devise policies. U-M Health says some service lines, due to their specific needs, have different considerations.

There’s not a specific timetable, but there are inherent complexities in acquiring a health system, and full integration is likely to take some time.

7. Mergers in Michigan

Two other Michigan hospital systems came together just a little over a year ago.

Beaumont Health and Spectrum Health completed their merger in early 2022. Last fall, the systems announced the merged organization was taking a new name: Corewell Health.

Corewell operates 22 hospitals across Michigan, along with 300 outpatient facilities and a health plan with more than 1 million members.

Trinity Health, based in Livonia, Mich., completed the acquisition of MercyOne Health in Iowa last year. Previously, Trinity had been jointly operating MercyOne under an agreement with CommonSpirit.