Two Michigan HIEs merged into Great Lakes Health Connect as federal money ran out

Health information exchanges ran on federal life support. The HITECH Act put $548 million into state- and territory-based HIEs, and it was running out. A Health Affairs survey found barely 25% of HIEs could cover operating costs from provider revenue and 74% reported long-term funding challenges. A January 2014 Black Book survey found usage grew 69% in a year, yet 72% of users expected only 10 of 220+ exchanges to function without further help by 2017; six in 10 HIEs still ran on HITECH money.

On July 1, 2014, Michigan Health Connect and the Great Lakes Health Information Exchange merged to form Great Lakes Health Connect, one of the nation's largest HIEs. The two organizations realized their missions were essentially the same and that they could better achieve their vision for a healthier Michigan together than independently, an official said. The merged exchange shares electronic health records of more than 5 million people across more than 80% of the state's hospital beds, with 20,000-plus providers serving over half of Michigan's 10 million residents.

The skepticism around the sector was blunt: 95% of payers, 83% of hospitals and 70% of physicians said most public HIEs struggled with flawed business models; 94% of payers saw no value proposition and 97% still struggled to exchange data with them. A California HealthCare Foundation report concluded HIEs had made progress but faced significant challenges — leaving open whether bigger, in Michigan's case, would be better, or enough.

One exchange covering more than 80% of Michigan hospital beds, 20,000+ providers and the records of 5M+ people — over half the state's 10M residents.

The HITECH grants that seeded state HIEs were expiring, and standalone exchanges had to find a durable business model or disappear.

The two exchanges' missions were essentially identical, so each was paying to build the same statewide capability twice.

Scale attracts participation: one exchange covering most of the state's hospital beds and providers is a stronger connective tissue than two partial networks.

Sector consolidation looked inevitable — users themselves expected only about 10 of 220+ exchanges to survive without assistance — so merging early beat merging late.

When the subsidy that created an industry dries up, running a duplicate network is a luxury: two exchanges with the same mission merged to reach viable scale before the money stopped.

The merger closed July 1, 2014, and the report is a same-week write-up, so no post-merger performance exists in the source. The article's own caution stands: against national surveys showing flawed business models and payer skepticism, it remained unclear whether bigger was better — or enough. The merged Great Lakes Health Connect started as one of the nation's largest HIEs by coverage, with the funding cliff that pushed the merger together still pending for the sector at large.