Vanderbilt University Medical Center is taking steps to operate as a separate, financially independent entity from Vanderbilt University.
The restructuring process is expected to take 12 to 18 months.
“We needed more freedom,” said Dr. C. Wright Pinson, CEO of the Vanderbilt Health System. “This gives us the opportunity to go to the debt markets independently of the university, which we need to grow and to continue building our networks.”
The Nashville-based medical center implemented a cost reduction plan last year to cut $100 million in fiscal 2014 and $250 million over two years. The move came as Vanderbilt was facing a $70 million revenue shortfall in its fiscal 2014 and as it prepared for long-term cuts to reimbursement and research funding.
Dr. Jeff Balser, dean of the medical school, will lead the new entity, which will retain the same name and be governed by a board with representatives from the medical center and the university.
Vanderbilt's current governance structure is unique among academic medical centers, the system said. After a yearlong review, its Board of Trust concluded that independence would give it more flexibility.
The change will not affect staffing levels or compensation, and the health system will continue to work closely with the medical school, according to a news release. Also, the system will have more leeway to create and expand affiliations with other healthcare providers—something it already has been doing across the region.
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