University of Michigan Health-Sparrow to Expand Psychiatric and Surgical Services

New $150 million projects include a behavioral health hospital and freestanding surgical center.

Published on Feb. 21, 2026

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The University of Michigan Health-Sparrow Hospital in Lansing, Michigan, is planning to build a new $83 million behavioral health hospital that will offer psychiatric care for geriatric, adult, and pediatric populations. The hospital will also construct a $60 million freestanding surgical facility to ease capacity at the main hospital. These projects are part of an $800 million investment commitment by the University of Michigan since taking over Sparrow in 2023.

Why it matters

The new behavioral health hospital will address a longstanding shortage of inpatient psychiatric care, especially for children and adolescents, in the Lansing region. The freestanding surgical center aims to improve access to surgical services and reduce wait times. These investments demonstrate the University of Michigan's commitment to expanding healthcare services and improving public health outcomes in Michigan's capital city.

The details

The 64-bed behavioral health hospital will replace Sparrow's existing psychiatric facility and include programs for adolescents as well as an outpatient partial hospitalization service. The $60 million freestanding surgical center will initially open with four operating rooms and have the potential to expand to six. Both facilities are expected to break ground this summer and open in 2028.

  • The University of Michigan Board of Regents approved the projects on February 20, 2026.
  • Groundbreaking for both facilities is expected this summer.
  • The new behavioral health hospital and surgical center are anticipated to open in 2028.

The players

University of Michigan Health-Sparrow Hospital

A healthcare system in Lansing, Michigan, that is part of the University of Michigan Health network.

David C. Miller

CEO of Michigan Medicine, the academic medical center of the University of Michigan.

Victor Hong

Clinical associate professor of psychiatry at the University of Michigan.

Margaret Dimond

Regional President of University of Michigan Health.

Sarah Hubbard

University of Michigan Regent.

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What they’re saying

“These investments would continue our commitment to improving access to care across the state, particularly for those who are most vulnerable.”

— David C. Miller, CEO of Michigan Medicine (Associated Press)

“For many years, decades really, there's been a desert of care especially in terms of the inpatient setting for pediatric care. This new hospital will enhance the care in the region, add 16 new beds for pediatric patients whereas before the closest inpatient bed for a child was about an hour away from Lansing.”

— Victor Hong, Clinical associate professor of psychiatry at the University of Michigan (Associated Press)

“Our communities deserve the level of care that is associated with U-M Health, and both of these projects address unmet needs, including the scarcity of behavioral health services in the region.”

— Margaret Dimond, Regional President, U-M Health (Associated Press)

What’s next

Groundbreaking for both the behavioral health hospital and freestanding surgical center is expected this summer, with the facilities anticipated to open in 2028.

The takeaway

These major investments by the University of Michigan in its Sparrow Health System demonstrate a commitment to expanding access to critical healthcare services, particularly in the areas of behavioral health and surgical care, for the Lansing community and surrounding region.