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University of Michigan Health moves to purchase Sparrow Health System

December 8, 2022
<p>The exterior of Sparrow Hospital in Lansing, Michigan, on Sept. 23, 2020.</p>

The exterior of Sparrow Hospital in Lansing, Michigan, on Sept. 23, 2020.

Photo by Annie Barker | The State News

University of Michigan Health’s board has announced the purchase of Sparrow Health System.

With an $800 million investment, UM Health plans to expand clinical care services to Mid-Michigan residents, a Thursday evening release said.

“This enables Sparrow to achieve our long-term strategy of helping to create a statewide system of care and allows us to accelerate growth and continue our 126-year commitment to providing world-class care close to home,” Sparrow Health System Board Chair John Pirich said in a statement.

The two health systems began working together in 2019 surrounding pediatric services, leading to further collaborations and agreements. 

“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,” Sparrow Health System CEO James Dover said in a statement.

Sparrow has been in rocky financial straits in recent years. In September, the company opened a $20 million emergency room in Okemos. Later that month, they confirmed they would be laying off hundreds of employees.

In November 2021, Sparrow's local branch of the Michigan Nurses Association, or the Professional Employees Council of Sparrow Hospital, authorized a strike due to stalled contract negotiations. The union eventually agreed to a new three-year contract in December 2021.

The UM collaboration is said to provide job growth and career development, as well as growth in UM Health’s minority investment in Sparrow’s health plan – Physicians Health Plan.

Crain's Detroit Business first reported this deal.

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