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1996 Harvard Business School Distinguished Service and Alumni Achievement Award to Marlene Krauss, M.D., Managing Director, KBL Healthcare Ventures

Marlene Krauss

With an MBA from Harvard Business School, an M.D. from Harvard Medical School, and passions for both investment banking and retinal surgery, Dr. Marlene Krauss has been reluctant to choose just one line of work. True to her creative spirit, however, she has found a way to merge her love of business and medicine into one career. As chairperson and CEO of KBL Healthcare, Inc., a Manhattan firm she helped found in 1991 to provide investment and merchant banking services to health-care companies, Krauss uses her medical knowledge to bring innovative medical technologies and services to market.

"I feel I bring a unique combination of medical and business expertise to the forming and financing of health-care companies," says Krauss, whose calm manner belies the hectic pace of her life. "It helps in the financing of a surgical device company, for example, to have over twenty years of business experience and also to be able to use the device in the operating room."

Krauss has a keen eye for spotting promising health-care ventures. Over the past decade she has directed some of Wall Street's most successful health-care transactions. In November 1992, for example, KBL created an innovative public buyout fund called KBL Healthcare Acquisition Corp. that enabled the firm to purchase-and sell in 1995 for $130 million - a chain of long-term health-care facilities. Another notable achievement was the creation, in 1993, of Cambridge Heart, Inc., a company that licensed technology developed by physicians at the Massachusetts Institute of Technology. This technology noninvasively images the electrical activity of the heart and has the potential for diagnosing people at risk for sudden cardiac death. Since such fatalities can now often be prevented with the use of implantable defibrillators, Cambridge Heart's technology promises to be an important diagnostic tool for saving lives.

Most recently, KBL has orchestrated several transactions involving managed-care services, "Given that the United States is becoming a managed-care society, the burning issue for our firm is to find ways to lower health-care costs while maintaining health-care quality", says Krauss, seated in her spacious midtown office. "Physicians and HMOs need not be adversaries. Everyone should want to preserve the high standard of health care in this country." Toward this end, KBL has formed CMMI (now LaserOne), a company that manages quality physician specialty networks, initially in the area of ophthalmology. CMMI provides its services to managed-care organizations with the goal of enhancing the quality of care while monitoring utilization to decrease costs. "It helps to be a physician communicating with other physicians, especially in ophthalmology, my area of specialization," Krauss says. "The ability to understand physician issues as well as those of HMOs and patients makes KBL value-added in the marketplace."

The only child of Hungarian immigrants, Krauss credits her parents with providing the encouragement she needed to make the most of her considerable talents. "My mother made me feel I could do anything," she says. Her entrepreneurial father was also a strong role model. Through sheer hard work he became the owner of several exclusive New York properties, including the Chelsea Hotel, a favorite haunt in the 1960s of many emerging writers, artists, and musicians, including Andy Warhol and Bob Dylan.

In the sixties, Krauss's path was far from the radical Chelsea. She graduated at the top of her class from the prestigious Bronx High School of Science, attended Cornell University as a Cornell Scholar, and entered HBS in 1965 at the exceptionally young age of twenty. After earning her MBA, she worked as an investment banker in New York City for eight years.

Wanting to "help humanity on a personal level," Krauss picked up some premed courses and entered Harvard Medical School at age thirty. Despite her relatively late start, she decided to pursue the long and arduous path required to become a specialist in one of medicine's most complex fields - vitreoretinal disease.

After ten years of medical training, however, Krauss says she "missed Wall Street." She opened a private retina practice in Manhattan, joined the staff of New York Hospital, and returned, part-time, to investment banking. In 1991 she made the full time commitment to business, leaving her practice and forming KBL Healthcare with her husband, Zachary Berk, an investment banker, who also holds a doctorate in optometry. "Now, instead of helping patients in a hands-on manner, I'm bringing new health-care technologies and services to the fore that contribute to people's well being in other ways," she says.

Krauss admits that being a pioneering woman has brought its share of challenges. "Traditionally, women have not been part of the 'old-boy network.' That's been a huge handicap in both business and medicine," she says. To assuage her feelings of isolation, she has long been involved in the women's movement, helping to found in 1969 the Women's Action Alliance, a national feminist organization that spawned Ms. magazine.

Several years ago, at the age of 44, Krauss had her first child. "Of all the things I've done, being a mother is by far the most rewarding and probably the most challenging. I couldn't go to school to prepare for it," she says. "Having a family when my career was already established has allowed me to organize my time much more freely. I love telling other women how old I was when I had Juliana, because they perk up and say, "Hey, after 40 it's not over." Indeed, for someone as dynamic as Dr. Krauss, it has probably only just begun.

KBL Healthcare Ventures
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New York, NY 10017
(212) 319-5555

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