Updated on December 9 at 1:31 p.m. ET
Sparrow Health System in Lansing is joining Michigan Medicine, the University of Michigan hospital system, to form a new statewide healthcare operation.
The agreement will create a network of shared resources between two of the largest hospital systems in the state.
Oversight boards for both health systems have approved the partnership. The Sparrow Health System Board of Directors gave its approval on November 28. The U of M Board of Regents followed suit and signed off on the agreement at its December 8 meeting.
The change won’t have an immediate effect on the day-to-day experience of patients.
But a Sparrow official said the agreement will enable the Lansing hospital system to expand services for mid-Michigan residents.
Sparrow President and CEO James Dover said many mid-Michigan patients already go to Ann Arbor for their healthcare needs. He said the hospital intends to leverage the new partnership to help these patients receive ongoing care where they live.
“The partnership with University of Michigan Health provides Sparrow the opportunity to take a greater leadership role in improving the health of the communities we serve,” said James Dover, Sparrow Health System president and CEO.
The two hospitals have committed to invest $800 million in Sparrow Health System’s facilities, operations, and other strategic investments over eight years, according to statements from both systems.
Paul Brown is the chairman of the University of Michigan Board of Regents. In a press release, he said the agreement strengthens the U of M Health System's ability to provide quality healthcare in communities beyond southeast Michigan and expands its mission as "a statewide referral site for the most critically ill."
President of U-M Health David Miller said the partnership will improve access to specialty treatment and promote healthcare advancements across the state.
"For Sparrow and for the Lansing community, I see the possibility of expanded clinical services, access to clinical trials and research and translational medicine that brings advances in the community at a faster pace,” Miller said.
Officials said Michigan Medicine was not purchasing or acquiring Sparrow Health. They called the partnership a "member substitution agreement" where two non-profit hospital systems collaborate and share resources.
Dover says the two systems will still officially remain separate corporations. He says agreements with labor unions and faculty from other schools will not be affected by the partnership.
He added the two hospital systems aim to officially file the agreement by the end of the year. The agreement is expected to be completed in the first half of 2023, though it will still need regulatory approval.
