Michigan Medicine announces plan to acquire Sparrow Health in Lansing

Michigan Medicine announces plan to acquire Sparrow Health in Lansing

Ann Arbor-based Michigan Medicine and Lansing-based Sparrow Health jointly announced a proposed merger agreement on December 8 that will take effect in the first half of 2023.

The Sparrow Health board of directors approved the deal on November 28 and the University of Michigan Board of Regents, the management body responsible for the university health care system, approved it on December 8.

In the corporate-speak that serves to conceal the financial interests driving the deal, a press statement said: “Sparrow Health System will join University of Michigan Health under a proposed agreement that will expand services to mid-Michigan residents, provide access to the highest level of care, improve facilities and technology, and begin a new chapter in Sparrow’s storied history.”

What the press release does not explain clearly, however, is that Michigan Medicine is taking over Sparrow Health, a hospital system that has been serving the Lansing and mid-Michigan region for the last 127 years. Michigan Medicine will spend $800 million to acquire 115 care sites currently operated by Sparrow Health, including six hospitals that range from Ionia in the northwest, Charlotte in the southwest and Carson City in the north, and within the city of Lansing, the capital of Michigan.

Michigan Medicine campus in Ann Arbor [Photo: uofmhealth.org]

In a report in Crain’s Detroit Business, Marschall Runge, CEO of Michigan Medicine and dean of the UM Medical School, said that “two-thirds of the investments will be in facility improvements and the last third will go to ‘substantive’ capital investments, such as new buildings and large technology investments.”

Michigan Medicine CEO Runge is currently the highest paid University of Michigan employee, with an annual salary of $1.57 million.

The merger announcement comes approximately 10 weeks after a months-long contract struggle by 6,000 nurses at Michigan Medicine was betrayed by the Michigan Nurses Association (MNA) and its Ann Arbor-affiliate, the University of Michigan Professional Nurse Association (UMPNC).