After a nearly three-year transition, Vanderbilt University Medical Center (VUMC) officially separated from Vanderbilt University at the end of April and now functions as an independent not-for-profit.

The move positions "both the University and the Medical Center for dramatic and sustained success," says Vanderbilt University Chancellor Nicholas Zeppos.

Officials made the decision to separate after a yearlong study conducted by the Vanderbilt Board of Trust found that the separation was necessary for the hospital to adapt in the evolving health care landscape.

A win-win

Now, the university can continue to invest in programs and faculty while VUMC has the flexibility to take risks "that will ensure that it thrives and grows in today's rapidly changing health care marketplace," Zeppos says.

For instance, the split will allow VUMC to partner with other medical organizations without needing the university's approval, as well as to expand its reach throughout the state.

VUMC's new governing structure, which includes an 11-member board, will "allow it to flourish in a totally different set of economic pressures than a university lives in," says VUMC President and CEO Jeff Balser. "Having a small, focused board that was entirely responsible for us—focused solely on our needs—is just a huge positive."

Why Vanderbilt Medical Center is breaking off from its university

The university and VUMC will continue to work together but are legally and financially separated. VUMC's name won't change, and its clinicians will remain faculty members at the university's medical school.

"We have taken care to assure VUMC will remain seamlessly connected to Vanderbilt University in fundamental ways," says Balser, "including a vast array of educational and research programs aimed at training the leaders of the future and driving innovation through discovery science."

Balser says VUMC now sees its peers as UPMC and Massachusetts General Hospital, other independent medical centers that have residency and training programs as well as a major focus on research.

"The medical center, as an employer, is better positioned to succeed in a very competitive and dynamic health care economy," Balser says. "The long-term future of the medical center is exceedingly bright."

Focus on growing provider network

The split from the university will also allow VUMC to grow Vanderbilt Health Affiliated Network, the largest provider-organized network of local doctors, health systems, and providers in the Tennessee area and surrounding states.

Through the network, Vanderbilt provides partner organizations access to medical specialists so they can expand services. Those organizations then send patients who require a higher level of expertise to Vanderbilt.

According to Balser, separating from the university gives the hospital the ability to receive funding from capital markets. He says that capital will be the "glue" necessary to construct new specialty centers with regional medical systems and to make partnerships with new hospitals "hum" (Rosin, Becker's Hospital Review, 5/2; Fletcher, Tennessean, 4/30; Vanderbilt University release, 4/29; Commins, HealthLeaders Media, 5/9).

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