The Lansing market is almost entirely the territory of two health systems: Sparrow Health System and McLaren Health Care. Sparrow Health System is the clear leader with 70 percent of inpatient market share and will only grow when it acquires the market’s third-largest health system Hayes Green Beach Memorial Hospital. After that, the health system sector will be so consolidated that only one independent hospital in the market remains. McLaren is building a replacement hospital to consolidate the services it offers. Both systems offer their own HMO health plans, but struggle to compete against the dominance of market leader Blue Cross Blue Shield of Michigan. McLaren affiliated with Spectrum Health to offer their Priority Health plans in the market, but it has not yet made an impact. If the two integrated, payer-provider systems can compete on price with their HMO plans, they may be able to cut into some of BCBS’s tight grip on the market.

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