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Published in Health Care

New contract with Sparrow Health deepens Priority Health’s Lansing-area presence

BY Thursday, December 15, 2022 01:50pm

A new contract with Sparrow Health in Lansing fills a notable hole in Priority Health’s care network across the Lower Peninsula.

The deal — which comes days after, but is unrelated to Sparrow Health’s proposed merger into University of Michigan Health — starts Jan. 1 and covers all of Priority Health’s lines of business: group commercial, Medicare, Medicaid and individual coverage. All of Sparrow Health’s facilities and 500 affiliated physicians will become in-network providers of Priority Health, which previously only had a Medicare contract with the health system for in-network coverage.

Mike Jasperson, senior vice president at Priority Health. COURTESY PHOTO

“We are proud of the strong provider network Priority Health has always maintained,” said Mike Jasperson, senior vice president of provider network and Health plan operations. “This expanded network contract strengthens access even more for our members and employers in the Lansing area.”

Sparrow Health System owns and operates six hospitals in Ionia, Ingham, Clinton, Eaton and Montcalm counties. The health system last week announced a deal to merge into University of Michigan Health that could close in the first half of 2023, pending regulatory approval.

The contract with Sparrow Health can help to expand Priority Health’s presence and ability to compete in the Lansing area, where the 1.2-million member Corewell Health-owned health plan has had a contract with McLaren Health since January 2017 to first gain entry into the market.

As of 2021, Blue Cross Shield of Michigan held a dominant 74-percent market share for health coverage in the Lansing metropolitan statistical area across all plan types, according to an American Medical Association annual report on health plan market shares in the U.S.

The Sparrow Health-owned Physicians Health Plan held a 17-percent market in the Lansing area.

For PPO coverage, Blue Cross Blue Shield had 90 percent of the Lansing-area market, to CVS Health’s 3 percent, according to the AMA that again ranked Michigan as the second-least competitive state in the nation for health coverage. 

Statewide as of January 2021, Blue Cross Blue Shield of Michigan held a 68-percent market share across all policy types to Priority Health’s 12 percent.

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