Michigan Medicine and Sparrow signed a partnership agreement in 2019, with the Ann Arbor health system integrating pediatric services at Sparrow Children’s Center in Lansing. A full merger was rumored during negotiations for the association. Michigan Medicine also made a minority investment in Sparrow’s health plan, Physicians Health, in 2019.
It’s unclear what will happen to Sparrow’s current partnerships with the College of Human Medicine and the Michigan State University College of Osteopathic Medicine.
The purchase comes as Sparrow Health System announced plans to lay off hundreds of workers earlier this fall after posting a $90 million loss in the first six months of the year, even as the system struggled with labor shortage.
The Lansing-based hospital system said in September that rising costs left it with no choice but to cut staff mainly in leadership and non-patient care roles. Some removals will have a clinical role as patient numbers decrease.
The system will not comment beyond its statement and will not determine the exact number of job losses.
“Costs have increased across all categories, including supplies and wages, wages and benefits, while patient numbers have fallen and contracting agency hiring costs have skyrocketed.” system wrote in the statement at the time. “In fact, the COVID pandemic may have been clinically over, but it has caused a financial pandemic for the nation’s healthcare providers. As a result, we’re making the cut. downsizing, affecting hundreds of roles in the health system.”
Michigan Medicine employs about 25,000 employees. Sparrow uses more than 7,500. Michigan Medicine operates just one hospital in Ann Arbor and 40 emergency facilities, while Sparrow operates six hospitals in Lansing, Carson, Ionia, Charlotte, St. Johns and a specialist hospital inside the main Lansing hospital. It also operates 56 ambulance facilities.
This story first appeared in Crain’s Detroit Business.