How Vanderbilt's MyHealth Bundles Saved Millions

Vanderbilt's MyHealth Bundles are saving millions of dollars through employer-focused, transparent, and clinically led value-based care.

Vanderbilt University Medical Center is pioneering a bundled care program that has reportedly saved employers and their employees nearly $5 million in healthcare costs over three years.

The Nashville-based health system detailed the results of its MyHealth Bundles program during a session at this year's HFMA conference in Denver. Executives said the sustainable, patient-centered, value-based care model reduced costs to employers and employees, cut down on unnecessary procedures and boosted patient satisfaction rates between 2020 and 2022.

"We didn't impose value-based care—we listened," Ruchika Talwar, MD, Medical Director of the Office of Episodes of Care Population Health at Vanderbilt Health Employer Solutions, said at the HFMA conference. "Employers told us where the pain points were, like unpredictable maternity costs or avoidable NICU admissions, and we built clinical models around that."

Financial Woes

The push comes amid news that VUMC will lay off up to 650 employees as part of a broader effort to reduce expenses by $300 million. The job cuts come in response to significant changes in federal funding and reimbursement, particularly reductions in support for research and patient care programs. The layoffs represent about 2% of VUMC’s workforce and will primarily affect nonclinical roles in research, administration, and support areas.

The layoffs follow an earlier round of budget reductions implemented this spring to slash $250 million, which included hiring freezes and other cost-saving measures. Jeff Balser, president and CEO of VUMC, previously warned that deeper cuts could be necessary if federal funding levels continued to fall.

Customization to Clinical Excellence

VUMC's bundled care approach starts with employer-specific concerns, not generic healthcare templates. One early case involved Metro Nashville Public Schools, one of Vanderbilt's first partners in the endeavor, where maternity care was the biggest cost concern. In response, VUMC created a maternity bundle that ultimately cut $1 million in NICU spending, avoiding 50 unnecessary neonatal ICU admissions.

Unlike many bundled care programs that start on the day of surgery, Vanderbilt's bundles begin the moment a patient is seen, and can extend up to a year post-procedure, depending on the condition. This structure allows VUMC to take on bigger financial risk but also ensures better patient outcomes.

Transparent Pricing and Broad Inclusion

Each MyHealth Bundle is sold at a single, predictable price—, regardless of patient complexity, thanks to close collaboration with actuarial teams. This model allows employers to budget more accurately and patients to avoid surprise bills. In fact, for those not on high-deductible plans, cost-sharing is often waived, Talwar said, which further reduces financial barriers to care.

Notably, the bundles include most patients, thanks to a built-in outlier policy that accommodates rare complications without excluding participants.

Evidence-Based Outcomes and Risk Management

Clinical excellence is central to the model. Vanderbilt uses evidence-based guidelines and monitors real-time data dashboards to track trends and catch early warning signs of rising costs. Physicians, who helped design the bundles, are deeply intertwined in the outcomes, not just the billing codes.

In condition-based bundles, for example, the financial model assumes that only patients who truly need surgery will get it, an assumption backed by Vanderbilt's hard data. In 2024, just 13% of hip osteoarthritis patients underwent surgery, compared to 32% in the general market. Similar reductions were seen in knee and shoulder cases.

These outcomes also translated to quicker recoveries: 90% of spinal surgery patients returned to work within 90 days.

A Blueprint for Scalable Value-Based Care

VUMC executives say their model is replicable, but only with a full commitment to patient-centered care, meaningful employer collaboration, and deep clinical alignment.

"Healthcare systems can't take a one-size-fits-all approach," Talwar emphasized. "You have to understand your population, listen to your partners, and build around that. That's how we move the needle, not just tweak it."

As value-based care continues to evolve, she said Vanderbilt's MyHealthBundles serve as an example of what's possible when health systems are willing to take risks and responsibility for the full continuum of care.

Talwar shared a guide on how other health systems can get started with a model like VUMC's. Her guide offers these action steps:

1. Identify high-impact conditions with cost variability.
2. Engage clinical leaders to build evidence-based pathways.
3. Partner with actuaries to set universal pricing.
4. Design full episodes of care including wraparound services.
5. Develop communication and navigation plans.
6. Launch with performance monitoring and iterative refinement.