EXHIBIT 10.18


                         VANGUARD HEALTH SYSTEMS, INC.
                           2001 ANNUAL INCENTIVE PLAN


1.   Purpose

     The purpose of the Vanguard Health Systems, Inc. 2001 Annual Incentive
Plan is to provide an incentive to enhance shareholder value and promote the
attainment of significant business objectives of the Company by basing a
portion of a selected Officer's compensation on the performance of such
Officer, the Company and/or a Business Unit.

2.   Definitions

          (a) "Award" means any annual incentive award, payable in cash, made
     under the Plan, which award may be based on (1) the change (measured as a
     percentage or an amount) in or of any one Performance Criterion or two or
     more Performance Criteria from one measurement period to another, (2) the
     difference (measured as a percentage or an amount) between (A) a specified
     target or budget amount of any one Performance Criterion or two or more
     Performance Criteria and (B) the actual amount of that Performance
     Criterion or two or more Performance Criteria, during any measurement
     period, (3) the extent to which a specified target or budget amount for
     any one Performance Criterion or two or more Performance Criteria is met
     or exceeded during any measurement period, or (4) any other award,
     including a discretionary award, that may be paid from time to time under
     the Plan.

          (b) "Award Schedule" means the Award Schedule established pursuant to
     Section 5.

          (c) "Board" means the Board of Directors of the Company.

          (d) "Business Unit" means any existing or future facility, region,
     division, group, subsidiary or other unit within the Company.

          (e) "Code" means the Internal Revenue Code of 1986, as amended, and
     any successor statute and the regulations promulgated thereunder, as it or
     they may be amended from time to time.

          (f) "Code Section 162(m) Award" means an Award intended to satisfy
     the requirements of Code Section 162(m) and designated as such in an Award
     Agreement.

          (g) "Committee" means either (i) the Compensation Committee of the
     Board or (ii) prior to establishment of the Compensation Committee of the
     Board, the Board.

          (h) "Company" means Vanguard Health Systems, Inc., a Delaware
     corporation.

          (i) "Covered Employee" means a Covered Employee within the meaning of
     Code Section 162(m)(3) or a person designated as a Covered Employee by the
     Committee.

          (j) "Officer " means any officer of the Company.

          (k) "Participant" means any Officer selected to receive an Award
     pursuant to the Plan for any Year.

          (l) "Performance Criterion" and "Performance Criteria" means any one
     or more of the following performance measures, taken alone or in
     conjunction with each other, each of which may be adjusted by the
     Committee to exclude the before-tax or after-tax effects of any
     significant acquisitions or


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     dispositions not included in the calculations made in connection with
     setting the Performance Criterion or Performance Criteria for the related
     Award:

               (1) (A) Basic or diluted earnings per share of common stock,
          which may be calculated

               (i) as income calculated in accordance with Section 2(l)(1)(D),
          divided by (x) the weighted average number of shares, in the case of
          basic earnings per share, and (y) the weighted average number of
          shares and share equivalents of common stock, in the case of diluted
          earnings per share, or (ii) using such other method as may be
          specified by the Committee;

               (B) Cash flow, which may be calculated or measured in any manner
          specified by the Committee;

               (C) Economic value added, which is after-tax operating profit
          less the annual total cost of capital;

               (D) Income, which may include, without limitation, net income
          and operating income and may be calculated or measured (i) before or
          after income taxes, including or excluding interest, depreciation and
          amortization, non-cash stock compensation, minority interests,
          extraordinary items and other material non-recurring expenses and
          restructuring and impairment charges, discontinued operations, the
          cumulative effect of changes in accounting policies and the effects
          of any tax law changes; or (ii) using such other method as may be
          specified by the Committee;

               (E) Quality of service and/or patient care which may be measured
          by (i) the extent to which the Company achieves pre-set quality
          objectives including, without limitation, patient satisfaction
          objectives, or (ii) such other method as may be specified by the
          Committee;

               (F) Return measures (including, but not limited to, return on
          assets, capital, equity, or sales), which may be calculated or
          measured in any manner specified by the Committee; or

               (G) The price of the Company's common or preferred stock
          (including, but not limited to, growth measures and total shareholder
          return), which may be calculated or measured in any manner specified
          by the Committee.

          (2) Except for Code Section 162(m) Awards, any other criteria related
     to performance, including the performance of one or more of the Business
     Units, individual performance or any other category of performance
     selected by the Committee.

     (m) "Performance Goals" means the performance objectives with respect to
one Performance Criterion or two or more Performance Criteria established by
the Committee for the Company, a Business Unit or an individual for the purpose
of determining whether, and the extent to which, payments will be made for that
Year or other measurement period with respect to an Award under the Plan.

     (n) "Plan" means the Vanguard Health Systems, Inc. 2001 Annual Incentive
Plan as set forth herein, as it has been or may be amended and/or restated from
time to time.

     (o) "Target Award" means the amount, which may be expressed as a dollar
amount or as a percentage of a Participant's salary, payable to a Participant
when actual performance with respect to any one Performance Criterion or any
two or more Performance Criteria equals the Performance Goals for that
Performance Criterion or those Performance Criteria established by the
Committee.


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          (p) "Year" means the Company's fiscal year.

3.   Administration

          (a) The Plan shall be administered by the Committee, which will
     consist of two or more persons (1) who (after the Company is subject to
     the provisions of Section 16 of the Securities Exchange Act of 1934 (the
     "Exchange Act") ) satisfy the requirement of a "nonemployee director" for
     purposes of Rule 16b-3 under the Exchange Act, and (2) who (after the
     Company is subject to the deduction limit under Code Section 162(m) )
     satisfy the requirements of an "outside director" for purposes of Code
     Section 162(m). The Committee's determinations under the Plan need not be
     uniform and may be made by it selectively among persons who receive or are
     eligible to receive Awards under the Plan, whether or not any Awards are
     the same or such persons are similarly situated. Without limiting the
     generality of the foregoing, the Committee will be entitled, among other
     things, to make non-uniform and selective determinations and to establish
     non-uniform and selective Performance Criterion, Performance Criteria,
     Performance Goals, the weightings thereof, and Target Awards. Whenever the
     Plan refers to a determination being made by the Committee, it shall be
     deemed to mean a determination by the Committee in its sole discretion.
     Without limiting the generality of the foregoing, the Committee may
     establish a Target Award for any Participant based on any one Performance
     Criterion or any two or more Performance Criteria.

          (b) It is the intent of the Company that this Plan and Code Section
     162(m) Awards hereunder satisfy, and be interpreted in a manner that
     satisfy, in the case of Participants who are or may be Covered Employees,
     the applicable requirements of Code Section 162(m), including the
     administration requirement of Code Section 162(m)(4)(C), so that the
     Company's tax deduction for remuneration in respect of Code Section 162(m)
     Awards for services performed by such Covered Employees is not disallowed
     in whole or in part by the operation of such Code section. If any
     provision of this Plan would otherwise frustrate or conflict with the
     intent expressed in this Section, that provision, to the extent possible,
     shall be interpreted and deemed amended so as to avoid such conflict. To
     the extent of any remaining irreconcilable conflict with such intent, such
     provision shall be deemed void as applicable to Covered Employees with
     respect to whom such conflict exists. Nothing herein shall be interpreted
     so as to preclude a Participant who is or may be a Covered Employee from
     receiving an Award that is not a Code Section 162(m) Award.

          (c) The Committee shall have the discretion, subject to the
     limitations described herein, including in Section 4 below relating to
     Code 162(m) Awards, to, among other actions, (1) determine the Plan
     Participants; (2) determine who will be treated as a Covered Employee and
     designate whether an Award will be a Code Section 162(m) Award; (3)
     determine the measurement period; (4) determine Performance Criterion,
     Performance Criteria, Performance Goals and Target Awards for each Year or
     other measurement period; (5) determine how Performance Criterion or
     Performance Criteria will be calculated and/or adjusted; (6) establish an
     Award Schedule; (7) establish performance thresholds for the payment of
     any Awards; (8) determine whether and to what extent the Performance Goals
     have been met or exceeded; (9) pay discretionary Awards, including awards
     from an exceptional performance fund, as may be appropriate in order to
     assure the proper motivation and retention of personnel and attainment of
     business goals; (10) make adjustments to Performance Goals and thresholds;
     and (11) determine the total amount of funds available for payment of
     Awards with respect to each Year or other measurement period.

          (d) Subject to the provisions of the Plan, the Committee shall be
     authorized to interpret the Plan, make, amend and rescind such rules as it
     deems necessary for the proper administration of the Plan, make all other
     determinations necessary or advisable for the administration of the Plan
     and correct any defect or supply any omission or reconcile any
     inconsistency in the Plan in the manner and to the extent the Committee
     deems desirable to carry the Plan into effect. Any action taken or
     determination made by the Committee shall be conclusive and binding on all
     parties. In the event of any conflict between an Award Schedule and the
     Plan, the terms of the Plan shall govern.


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4.   Code Section 162(m) Awards

     A Participant who is or may be a Covered Employee may receive a Code
Section 162(m) Award and/or an Award that is not a Code Section 162(m) Award.
Notwithstanding anything elsewhere in the Plan to the contrary, as and to the
extent required by Code Section 162(m), the grant of a Code Section 162(m)
Award to a Participant must state, in terms of an objective formula or
standard, the method of computing the amount of compensation payable to each
Covered Employee and must preclude discretion to increase the amount of
compensation payable that would otherwise be due upon attainment of such goals.
All determinations made by the Committee pursuant to Section 3 above related to
a Code Section 162(m) Award will be made in a timely manner, as required by
Code Section 162(m), including, without limitation, the requirements that the
Performance Goals, Performance Criteria and Award Schedules be established not
later than 90 days after the commencement of any fiscal year of the Company. An
Award Schedule for a Covered Employee shall set forth for each Code Section
162(m) Award, the terms and conditions applicable to the Award, as determined
by the Committee, not inconsistent with the terms of the Plan, and shall
specify that such Award is a Code Section 162(m) Award. Before any Code Section
162(m) Award is paid, the Committee shall certify that the Performance Goals
and any other material terms of such Award have been satisfied. Notwithstanding
the foregoing, the Performance Criteria with respect to Code Section 162(m)
Awards shall be limited to the Performance Criteria set forth in Section
2(l)(1).

5.   Awards

     The Committee may establish a Performance Criterion and/or two or more
Performance Criteria and Performance Goals for each Year or other measurement
period. If the Committee establishes two or more Performance Criteria, the
Committee may in its discretion determine the weight to be given to each
Performance Criteria in determining Awards. The Committee shall establish an
Award Schedule for each Participant for each Year, which Award Schedule shall
set forth the Target Award for such Participant payable at specified levels of
performance, based on the Performance Goal for each Performance Criterion and
the weighting, if any, established for such criterion. The Committee may vary
the Performance Criteria, Performance Goals and weightings, if any, from
Participant to Participant, Award to Award, Year to Year and measurement period
to measurement period.

6.   Eligible Persons

     Any Officer shall be eligible to participate in the Plan. No Officer shall
have a right to be selected to participate in the Plan, or, having once been
selected, to be selected again.

7.   Amount Available for Awards

     The Committee shall determine the amount available for payment of Awards
in any Year or any other measurement period. Notwithstanding anything else in
this Plan to the contrary, the aggregate maximum amount that may be paid to a
Participant during any Year with respect to all Awards under the Plan shall be
$5,000,000.

8.   Determination of Awards

          (a) The Committee shall select the Participants and determine which
     Participants, if any, are to be treated as Covered Employees and which
     Awards, if any, are to be Code Section 162(m) Awards. Except in the case
     of Code Section 162(m) Awards, the Committee shall determine the actual
     Award to each Participant for each Year or other measurement period,
     taking into consideration, as it deems appropriate, the performance of the
     Company and/or a Business Unit, as the case may be, for the Year or other
     measurement period in relation to the Performance Goals theretofore
     established by the Committee, and the performance of the respective
     Participants during the Year or other measurement period. The fact that an
     Employee is selected as a Participant for any Year or other measurement
     period shall not mean that such Employee necessarily will receive an Award
     for that Year or other measurement period. Notwithstanding any other
     provisions of the Plan to the contrary, the Committee may make
     discretionary Awards as it sees fit under the Plan, except in the case of
     Code Section 162(m) Awards, which may be adjusted only downward.


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          (b) Code Section 162(m) Awards shall be determined according to a
     Covered Employee's Award Schedule based on the level of performance
     achieved and such Covered Employee's Target Award. All such determinations
     regarding the achievement of Performance Goals and the determination of
     actual Code Section 162(m) Awards will be made by the Committee; provided,
     however, that the Committee may decrease, but not increase, the amount of
     the Code Section 162(m) Award that otherwise would be payable.

9.   Distribution of Awards

          (a) Unless otherwise determined by the Committee, Awards under the
     Plan for a particular Year or other measurement period shall be paid as
     soon as practicable after the end of that Year, unless the time of payment
     is otherwise specified in an Award Schedule.

          (b) To the extent that the Company's tax deduction for remuneration
     in respect of the payment of an Award to a Covered Employee would be
     disallowed under Code Section 162(m) by reason of the fact that such
     Covered Employee's applicable employee remuneration, as defined in Code
     Section 162(m)(4), either exceeds or, if such Award were paid, would
     exceed the $1,000,000 limitation in Code Section 162(m)(1), the Committee
     may, in its sole discretion, defer the payment of such Award; provided
     that the Committee may at any time accelerate the payment of previously
     deferred Awards. Deferred awards will be deemed credited at a rate
     determined by the Committee from time to time.

10.  Termination of Employment

     A Participant must be actively employed by the Company on the date the
amount payable with respect to his/her Award is determined by the Committee
(the "Determination Date") in order to be entitled to payment of any Award for
that Year or other measurement period. In the event active employment of a
Participant shall be terminated before the Determination Date for any reason
other than discharge for cause or voluntary resignation, such Participant may
receive such portion of his/her Award for the Year or other measurement period
as may be determined by the Committee. A Participant discharged for cause shall
not be entitled to receive any Award for the Year or other measurement period.
A Participant who voluntarily resigns prior to the Determination Date shall not
be entitled to receive payment of any Award for the Year or for any past
measurement period, including any amount with respect to the portion of any
Award remaining to be paid over more than one Year or other measurement period,
unless otherwise determined by the Committee.

11.  Miscellaneous

          (a) Nonassignability. No Award will be assignable or transferable
     without the written consent of the Committee in its sole discretion,
     except by will or by the laws of descent and distribution.

          (b) Withholding Taxes. Whenever payments under the Plan are to be
     made, the Company will withhold therefrom an amount sufficient to satisfy
     any applicable governmental withholding tax requirements related thereto.

          (c) Amendment or Termination of the Plan. The Committee may at any
     time amend, suspend or discontinue the Plan, in whole or in part. The
     Committee may at any time alter or amend any or all Award Schedules under
     the Plan to the extent permitted by law. No such action may be effective
     with respect to any Code Section 162(m) Award to any Covered Employee
     without approval of the Company's shareholders if such approval is
     required by Code Section 162(m)(4)(C).

          (d) Other Payments or Awards. Nothing contained in the Plan will be
     deemed in any way to limit or restrict the Company from making any Award
     or payment to any person under any other plan, arrangement or
     understanding, whether now existing or hereafter in effect.


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          (e) Payments to Other Persons. If payments are legally required to be
     made to any person other than the person to whom any amount is available
     under the Plan, payments will be made accordingly. Any such payment will
     be a complete discharge of the liability of the Company.

          (f) Limits of Liability.

               (1) Any liability of the Company to any Participant with respect
          to an Award shall be based solely upon the obligations, if any,
          created by the Plan and the Award Schedule.

               (2) Neither the Company, nor any member of its Board or of the
          Committee, nor any other person participating in any determination of
          any question under the Plan, or in the interpretation, administration
          or application of the Plan, shall have any liability to any party for
          any action taken or not taken in good faith under the Plan.

          (g) Rights of Officers.

               (1) Status as an Officer eligible to receive an Award under the
          Plan shall not be construed as a commitment that any Award will be
          made under this Plan to such Officer.

               (2) Nothing contained in this Plan or in any Award Schedule (or
          in any other documents related to this Plan or to any Award or Award
          Schedule) shall confer upon any Officer or Participant any right to
          continue in the employ or other service of the Company or constitute
          a contract or limit in any way the right of the Company to change
          such person's compensation or other benefits or to terminate the
          employment or other service of such person with or without cause.

          (h) Section Headings. The section headings contained herein are for
     the purposes of convenience only, and in the event of any conflict, the
     text of the Plan, rather than the section headings, will control.

          (i) Invalidity. If any term or provision contained herein will to any
     extent be invalid or unenforceable, such term or provision will be
     reformed so that it is valid, and such invalidity or unenforceability will
     not affect any other provision or part hereof.

          (j) Applicable Law. The Plan, Awards and Award Schedules and all
     actions taken hereunder or thereunder shall be governed by, and construed
     in accordance with, the laws of the state of Delaware without regard to
     the conflict of law principles thereof.

          (k) Effective Date. The Plan will become effective upon adoption by
     the Board.

          (l) Post-Public Shareholder Approval. In the event that (i) the
     Company registers a class of its common equity securities under Section 12
     of the Exchange Act and (ii) the Committee issues or wishes to issue a
     Code Section 162(m) Award, then the Plan (or the material terms of the
     Performance Criteria) shall be submitted to the Company's shareholders for
     approval (A) no later than the date of the first meeting of shareholders
     at which directors are to be elected that occurs either (x) after the
     close of the third calendar year following the calendar year in which the
     Company's initial public offering occurs or (y) in case the Company
     becomes publicly held without an initial public offering, during the first
     calendar year following the calendar year in which the Company becomes
     publicly held and (B) no later than the first shareholders meeting that
     occurs in the fifth year following the year in which the shareholders
     previously approved the Plan (or the material terms of the Performance
     Criteria).


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