Despite the promise of foundation models in medical AI, current systems remain limited - they are modality-specific and lack transparent reasoning processes, hindering clinical adoption. To address this gap, we present EVLF-FM, a multimodal vision-language foundation model (VLM) designed to unify broad diagnostic capability with fine-grain explainability. The development and testing of EVLF-FM encompassed over 1.3 million total samples from 23 global datasets across eleven imaging modalities related to six clinical specialties: dermatology, hepatology, ophthalmology, pathology, pulmonology, and radiology. External validation employed 8,884 independent test samples from 10 additional datasets across five imaging modalities. Technically, EVLF-FM is developed to assist with multiple disease diagnosis and visual question answering with pixel-level visual grounding and reasoning capabilities. In internal validation for disease diagnostics, EVLF-FM achieved the highest average accuracy (0.858) and F1-score (0.797), outperforming leading generalist and specialist models. In medical visual grounding, EVLF-FM also achieved stellar performance across nine modalities with average mIOU of 0.743 and Acc@0.5 of 0.837. External validations further confirmed strong zero-shot and few-shot performance, with competitive F1-scores despite a smaller model size. Through a hybrid training strategy combining supervised and visual reinforcement fine-tuning, EVLF-FM not only achieves state-of-the-art accuracy but also exhibits step-by-step reasoning, aligning outputs with visual evidence. EVLF-FM is an early multi-disease VLM model with explainability and reasoning capabilities that could advance adoption of and trust in foundation models for real-world clinical deployment.