In retrospect, the university and the medical school eventually parting seems ordained from the start. In the early 20th century, the American Medical Association was pressing medical schools, many of which were proprietary (owned by doctors, their doctor brothers, their doctor sons), to strengthen their science curriculum, which was most easily accomplished by affiliating with a college or university. Affiliating is the operative word here. Marquette partnering with the Milwaukee Medical College, then in the Trinity Hospital at Ninth and Wells (where the 1950s addition to Central Library stands) was part of growing from college to university.
You can read Father Raphael Hamilton's university history, MCW's "Anchor for the future," and the MCW web site for more on the early decades, including the students' walkout 100 years ago, when the AMA gave the Marquette medical program a poor grade. The medical students withdrew en masse and trooped up Fourth Street to the still-standing Wisconsin College of Physicians and Surgeons (the painted Marquette sign on its cornice was still visible thirty years ago). WCPS had a better AMA grade, but poor finances. The mutual solution for the underfunded school and the university that had just lost its medicos? Marquette purchased WCPS and regained all the students, who with their successors studied at Fourth and Reservoir until the Cramer building was built on Fifteenth Street in the 1930s (you likely know it as the Schroeder Complex). The school ran Trinity Hospital for a few more years.
Thereafter, Marquette had no hospital in a neighborhood once full of hospitals: Saint Anthony's, Mount Sinai, Children's, Deaconess, Samaritan, and the County Emergency Hospital (the now-shuttered Columbia near UWM once had a maternity clinic at Tenth and Michigan). Absent a hospital, the school's income was limited to tuition, some grants, and gifts. Because of the affiliation, rather than a true merger, the medical school had its own board and endowment. It frequently ran a debt, about which you will hear debate (I've seen evidence enough to be convinced that the university carried the medical program for years).
When the combination of possible federal funding, with an explicit disassociation from the religiously-sponsored school, met the great support by what used to be called "the city fathers" for what up-to-date municipalities had - a regional medical complex - the Marquette University School of Medicine was spun off, becoming the Marquette Medical School in 1967. Still operating on campus for a decade, it took its present name in 1969. Once the Medical College of Wisconsin moved to the County Medical Complex, the old school was remodeled with the substantial help of the Schroeder Foundation to house our other health programs. Harriet Cramer's name was chiseled off the doorway and the medical shield ground down; you can easily read the remnants over the Fifteenth Street door.
That's a capsule of what happened. Had there been fewer nearby hospitals, the state might have issued Marquette a hospital license. With an income stream, I expect the the school would have prospered and grown. MCW now has its own strong identity and strengths beyond what the university can now offer it (check out their research support versus ours). A reunion of the two is hardly imaginable.
