Making a Health System Merger Succeed: Michigan Medicine's Journey Toward a High-Quality, Coordinated Statewide System of Care.

Abstract

With U.S. health systems increasingly entering partnership, acquisition, and merger agreements, the usual stated goals are improvement in quality of care and patient experience, along with improved financial performance. But attainment of these goals has been inconsistent at best. After its April 2023 acquisition of Sparrow Health, Michigan Medicine and its five-hospital system, University of Michigan Health, launched a major effort to advance business, clinical, and cultural integration across the new 11-hospital enterprise. The goal was to achieve a coordinated, integrated statewide system of care that delivered improved quality and better experience, while providing academic hospital-caliber care closer to home for patients across the state. Those efforts have led to improved financial performance. The adjusted operating margin at the former Sparrow hospitals, renamed University of Michigan Health-Sparrow (UM Health-Sparrow), increased from negative US$158 million in 2022 to positive US$28 million in 2024. Employees' response to a survey question about their level of satisfaction with UM Health-Sparrow as a place to work, measured on a 1 to 5 scale, increased from 3.54 in 2022 to 3.87 in 2024. Annual turnover of registered nurses at UM Health-Sparrow dropped from 17.4% in 2022 to 7.7% in 2024. Clinical integration, driven by the development of local clinical programs, initiatives to coordinate statewide care, and innovative technology solutions, has resulted in a higher quality of care delivered closer to home. A new neurosurgical program at UM Health-Sparrow has improved local access for patients with more complex diagnoses while also delivering higher-quality care. In the Michigan Spine Surgery Improvement Collaborative, the overall quality score increased from 63% in 2022 to 91% in 2024. For cultural integration, the keys to success have been leadership alignment, a clear vision and goals, a supportive infrastructure, strong systemwide communication, and achieving and celebrating early wins. Although the journey is ongoing, progress to date demonstrates that a carefully planned and executed strategy for system integration can yield greater operational efficiency, meaningful improvements in patient care, and progressive cultural alignment.