diff --git a/server/index.js b/server/index.js
index 40b38cc76..3c40d158b 100644
--- a/server/index.js
+++ b/server/index.js
@@ -167,6 +167,13 @@ app.get('/healthz', (req, res) => {
 app.get('/api/health', (req, res) => {
     try {
         const healthSummary = stateManager.getHealthSummary();
+        // Add system info including placeholder status
+        const state = stateManager.getState();
+        healthSummary.system = {
+            configPlaceholder: state.isConfigPlaceholder || false,
+            hasData: stateManager.hasData(),
+            clientsInitialized: Object.keys(global.pulseApiClients?.apiClients || {}).length > 0
+        };
         res.json(healthSummary);
     } catch (error) {
         console.error("Error in /api/health:", error);
diff --git a/src/public/setup.html b/src/public/setup.html
index 013816bec..7132b81f6 100644
--- a/src/public/setup.html
+++ b/src/public/setup.html
@@ -540,8 +540,8 @@
           console.log('Health check response:', health);
           
           // Check if the server has successfully loaded configuration
-          // Look for signs that API clients are initialized and not in placeholder mode
-          if (health.system && health.system.configPlaceholder === false) {
+          // Look for overall health and recent activity
+          if (health.overall === 'healthy' && health.lastUpdate && health.connections && health.connections.total > 0) {
             showSuccess('Configuration applied successfully!', true, false);
             
             // Re-enable the save button