Amy Finney, MBA 20
COO, Bicycle Health

Amy Finney, MBA 20.During her 12-year career at One Medical, Amy Finney held many leadership positions. But her most consequential role came in February 2020, when she led One Medical’s emergency response to the COVID-19 pandemic.

“Those first few weeks in February and early March, a small group of us worked around the clock researching and scripting guidelines for our clinical and administrative staff,” says Finney. “We were on call 24 hours.”

Finney and her incident response team created up-to-date clinical logistics and COVID-19 testing protocols to meet the needs and specific guidelines for One Medical’s 200+ clinics nationwide.

Finney was later promoted to vice president of operations and named one of San Francisco Business Times’ 2022 Women of Influence for her work—though leading a national emergency response was a departure from her original career goals.

Inspired by her sister’s complex health journey, Finney had planned to attend medical school. But with every new opportunity, her work at One Medical became more meaningful. In 2017, Finney enrolled in Haas’ evening and weekend program, which ultimately put her on the fast track to lead One Medical’s operations. Finney has since moved on and is now COO of Bicycle Health, a telehealth company that provides online treatment to people for opioid use disorder.

“I’m very grateful that I had Haas to help me expand my perspective and confidence,” says Finney. “I hope that other women in their careers can make the same steps that I feel I’ve been able to make.”

linkedin.com/in/amy-finney

How Berkeley Haas research fueled a company that could save Medicare patients from costly mistakes  

Choosing a Medicare plan is both complicated and consequential. Berkeley Haas research has fueled a new company that simplifies the process, promising to save money and improve health for millions of people.

Photo of a woman with gray hair in a ponytail smiling as she looks at a laptop screen showing the Healthpilot website.
Photo courtesy of Healthpilot

It’s Medicare open enrollment season, and the tens of millions of retirees who rely on the government program for health care are grappling with an abundance of options, a dearth of information, and no good way to personalize or compare plans.

“It is not a well-functioning market,” says Jon Kolstad, an associate professor at UC Berkeley’s Haas School of Business who studies the economics of health care. “And yet the choices people make have high financial stakes—consumers are typically on fixed incomes—and critical health implications.”

Kolstad has been studying this challenge since he was in graduate school and, with several academic collaborators, recently helped turn a broad foundation of research into a company centered on helping people make better decisions when choosing a Medicare plan. Healthpilot, which launched in late 2020, uses machine learning to compare Medicare plans and suggest options that are personalized to each person’s current circumstances, projected health needs, and risk tolerance. It’s also free to use.

“We recognized the power of this highly predictive algorithm developed to solve a critical unmet healthcare need for seniors who are evaluating Medicare plans,” says Healthpilot CEO Seth Teich. “We believe that Healthpilot’s platform is a transformative technology that empowers consumers to easily navigate through the complexity of plan choices to find, and enroll in, their best coverage option.”

A desperate need for innovation

People with questions about Medicare enrollment have long relied on phone calls to private agents who walk them through the decision. But there’s a problem: “In reality, these brokers, who are supposed to be experts, do no better at selecting a plan than the average person,” Kolstad says.

In a 2021 paper, Kolstad and several colleagues, including UC Berkeley economist Ben Handel, demonstrated that brokers are prone to the same flawed judgment as everyone else. For instance, they place too much weight on a plan’s premium while overlooking other costs, such as out-of-pocket expenses. The result is that consumers working with brokers pay $1,260 more per year on average than they would if they enrolled in the best plan.

This is not the result of brokers’ bad intentions but simply because solving which plan is best for which person “is a very complex computational problem,” Kolstad says. In fact, the 2021 paper found that when brokers were provided with an AI assistant to help them suggest a plan, they saved consumers about $300 per year. (This is a conservative estimate.)

Healthpilot’s promise lies with its ability to use AI to properly weight the many fixed and projected costs of every available plan, sifting carefully—and impartially—through these multidimensional relationships. The algorithm operates by comparing every Medicare enrollee with millions of similar people and then forecasting the likelihood of different medical complications. By pairing this forecast with known information—including, with users’ permission, secure access to the medications people take and the doctors they see, along with information they provide directly—Healthpilot then determines which plan is ideal and ranks the alternatives.

The algorithm also considers individual appetites for risk. “Some people have very little risk aversion, and they would rather have low payments now and gamble on how they fare,” Kolstad says. “The plan that gets recommended to this kind of person should be different than the plan that gets recommended to someone who is very risk averse, who wants a high premium now in order to know that they’ll be covered.”

Benefiting individuals and the marketplace at large

The financial benefits for individuals are straightforward: Choosing the right Medicare plan generally means better coverage and less expense. These savings also accrue to the federal government, which finances Medicare.

A subtler benefit are gains in well-being and even lower mortality rates. One working paper co-authored by Kolstad found that people who have to pay more out of pocket cut back on important health care services. A related paper, co-authored by Ziad Obermeyer of Berkeley Public Health with researchers at Stanford and Harvard, found that a $100 bump in per-month cost-sharing for drugs—exactly the kind of mistake people make without good guidance—increases mortality by 13.4%, as people forego essential drugs such as blood pressure medication.

Healthpilot is able to deliver these financial and health-related benefits to consumers for free because of the structure of the Medicare market. Since Medicare is a valuable source of revenue for insurance companies, the companies pay commissions to brokers for each person that they enroll. If Healthpilot sends someone to Humana, Humana pays; if instead the enrollee goes to Blue Cross-Blue Shield, then Blue Cross-Blue Shield pays.

That’s a crucial point: Because these commission amounts may vary by carrier, human agents may be biased in their plan recommendation based on the commission they are paid. Healthpilot’s algorithm does not factor commissions into its recommendations and does not steer people toward any particular plan or company based on financial incentives. “There’s no distortion in the platform or plan recommendation, which is unique in the industry,” Kolstad says.

This also has the potential to inspire greater innovation and efficiency in the insurance market as a whole—one of Kolstad’s main interests. As a point of comparison, consider the tech market: When a company like Apple creates a product that people like, they buy it; when it creates a product people don’t like, they don’t buy it. This is quickly reflected in the company’s revenue and share price.

Because insurance products are so much more complicated, consumer decisions rarely reflect clear notions about quality; people often enroll, and stay enrolled, in plans that don’t deliver value. Healthpilot, by sorting people into plans that genuinely benefit them, could bring much greater transparency into the marketplace and produce meaningful information for companies to build better plans, Kolstad says.

“For better or worse, we rely on competing private plans in Medicare. That’s the approach we’ve taken because we believe that a private market will offer innovation,” Kolstad says. “Giving customers a greater ability to match with plans that give them the coverage they want and need will reward innovators. That means Healthpilot isn’t just a digital enrollment solution for consumers but can be a tool to make the whole market function more as it should.”

Health Check

Management strategy influences medical treatment 

Woman with both hands on her pregnant belly.

In today’s healthcare landscape, physicians generally have the option to keep running their own practice, sell to a hospital and become a salaried employee of that facility, or sell to a physician practice management company (PPMC). For doctors, it can seem like a no-brainer: Management experts, often private equity firms, offer to handle the logistical and financial drudgery of their practices, leaving the doctors to focus on patient care.

However, Assistant Professor Ambar La Forgia has found that even PPMCs claiming to preserve physician autonomy can alter clinical outcomes for better or worse.

C-sections are more profitable than vaginal births because insurance companies typically pay out more in reimbursements.

The study, published in Management Science, examined the strategies adopted by PPMC-owned obstetrician and gynecologist practices and found they influenced rates of cesarean sections for low-risk patients.

La Forgia tracked three PPMC-owned practices that together accounted for more than 40% of Florida’s OB-GYNs between 2006 and 2014. One PPMC focused on attracting “value”-based contracts, which link payment to clinical performance by providing clinical management services, while two focused on raising revenue by providing financial management services and negotiating higher-paying, fee-for-service contracts, which link payment to quantity of services.

C-sections are more profitable than vaginal births because insurance companies typically pay out more in reimbursements. But unnecessary C-sections can increase risks for both mother and infant, so a rise in C-sections performed on mothers at low risk for childbirth complications can raise suspicions.

La Forgia found that the OB-GYN practice focusing on clinical management cut C-sections for low-risk women by 22%. Those that focused on financial management showed a 10% to 11% rise in C-sections.

Notably, the two financially managed PPMCs performed more C-sections on privately insured patients than those insured by Medicaid, the government insurance program that typically covers people with lower incomes. Florida, La Forgia notes, is one of the few states where Medicaid reimburses physicians at the same rate for C-sections and vaginal births.

“Even though PPMCs say they preserve physician autonomy, managerial changes do appear to influence physician treatment choices,” says La Forgia.

Haas welcomes hundreds of new undergrad, MBA, PhD students to campus

Berkeley Haas welcomed an accomplished group of nearly 700 new full-time MBA, undergraduate, and PhD students to campus, kicking off the start of the fall 2023 semester. (The new evening & weekend and executive MBA classes arrived on campus earlier this summer.)

Full-time MBA program

A total of 244 new full-time MBA students kicked off five days of Week Zero orientation last Monday. Orientation included sessions on academic life at Haas, diversity, equity, inclusion, justice and belonging (DEIJB), team building, and career planning.

Wendy Guild, the new assistant dean of MBA programs at Haas, welcomed the class. “I want to celebrate the fact that you are here,” she said, noting that 2023 is a special year for Haas, marking the school’s 125th anniversary. “We have staying power,” she said. “We’re not going anywhere… We’re just getting better.”

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A total of 244 new full-time MBA students in the Class of 2025 arrived last week for Week Zero orientation. Wendy Guild, assistant dean of MBA programs, welcomed the group, noting that Haas is celebrating a special 125th anniversary this year.
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The new MBA class is comprised of 41% women; 20% are first-gen.
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Prof. Don Moore, acting Haas dean, urged students to reach out to each other and take advantage of the resources at Haas, especially when the curriculum gets tough. "All of us want to see you succeed," he said.
FTMBA 2025
Introducing the Gold Cohort!
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Introducing the Axe cohort!
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Introducing the Oski cohort!
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Introducing the Blue cohort!
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The Haas Undergraduate Program team welcomed 421 new students Monday. A total of 3,306 students applied to the program.
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The undergraduate class includes103 transfer students and 240 continuing UC Berkeley students.
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New students met up in the Haas courtyard throughout orientation.
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All photos by Jim Block and Noah Berger.

New students participated in a whirlwind of orientation activities—from a scavenger hunt to an ice cream social to cleanup work at a local nonprofit that supports people who are homeless.

The MBA students are an accomplished group, with an average of nearly six years of work experience, with 20% coming the tech sector and 24% from consulting.

Remy Freire, MBA 25, was a consultant at Bain & Company in Washington D.C. before coming to Haas.

“I’m interested in climate tech and renewable energy and I thought that the MBA would be a chance to take classes and do an internship in that area, and get some hands-on experience. A lot of folks are interested in this at Haas and I’ll be meeting people with similar interests to mine.”

woman with short hair wearing large earrings
Imogen O’Connor, MBA 25

The class boasts 41% women and is richly international, including students from 39 countries.

Imogen O’Connor, MBA 26, worked as an analytical manager with the National Health Service (NHS) in the UK before she came to Haas.

“What really prompted me to do an MBA was around change management and leadership because I was coming up against a lot of barriers in the NHS,”  she said. “I really care about health care and just helping people. I think I need to develop certain skills in order to do that properly.”

The class has an average collective GMAT score of 732, and GREs of 163 quant and 161 verbal, and an average GPA of 3.63.

Eric Askins, director of MBA admissions, told the students to expect to learn from peers who come from a variety of backgrounds and experiences. Notably, 20% of the students in this class are the first generation of college students in their families. Fourteen of the new students are pursuing a dual MPA/MPH (public health) degree; nine are enrolled in the MBA/MEng (engineering) program.

Orientation week alumni speaker Lo Toney, MBA 97, founding managing partner at Plexo Capital, shared his wisdom with the class, encouraging students to explore and take advantage of the breadth and depth of the UC Berkeley and Haas campus resources, focus on academics in the first quarter in particular, and reach out to alumni to build a network.

Undergraduate program

The entering undergraduate class is 421 students strong this year.  The new class includes 103 transfer students and 240 continuing students, as well as new undergraduates students enrolled in special undergrad programs including The Global Management Program (GMP), The Robinson Life Science, Business, and Entrepreneurship Program (LSBE) (25 students), and the Management Entrepreneurship and Technology (M.E.T).

Acting Dean and Professor Don Moore, whose research covers leadership and confidence in business and beyond, welcomed the students.

“You’re joining a community of innovators, renowned researchers, entrepreneurs, and movers and shakers who have made a profound impacts on business and on society,” he said.

“You’re joining a community of innovators, renowned researchers,  entrepreneurs, and movers and shakers who have made a profound impacts on business and on society.” – Acting Dean Don Moore

Moore said the long list of leaders who embody the Berkeley Haas Defining Leadership Principles (Question the Status Quo, Confidence Without Attitude, Students Always and Beyond Yourself) includes professional golfer Collin Morikawa, BS 19, who won the 2020 PGA Championship; Nabeela Syed, BS 21, the first Muslim Indian-American and the youngest woman to serve in the Illinois House of Representatives; and gaming entrepreneur Kevin Chou, BS 02, who with his wife,  Dr. Connie Chen, provided the largest-ever personal gift to UC Berkeley by an alumni under the age of 40 to help fund Chou Hall.

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Undergraduate students mingle in the Haas courtyard. Photo: Noah Berger

Emma Hayes Daftary, assistant dean of the undergraduate program, told the students that “the DLPs will challenge you to shift from what you, as an individual, can achieve, to what we, as a community, can accomplish.”

“We are living in a time of tremendous global transition, and within this time of upheaval and transition comes an urgent call for informed, collaborative, effective leaders,” she said. “There are urgent issues that are facing us—urgent issues that will require extraordinary leadership to develop and execute solutions to solve them.”

PhD program

The PhD program welcomed its largest-ever cohort of 19 new students from around the world—including Russia, China, Ethiopia, India, South Korea, Nigeria, Portugal, Canada, and Germany.

New students include Abdulmuttolib (Abdul) Salako, Ziyi Liu, Sean Chen, Sarah Danner,  Hanna Yu, Sara Shemali, Jordan Mickens, Nikita (Nick) Akimov, Wenxiao Yang, Srikanth Janjirala, Yutao Chen, Maggie Ye, Skyler Chen, David Gravanita , William Zhang, Zi Yang Chen, Nathan Godin, Nick Otis, and Fikremariam (Fikre) Gedefaw.

View PhD student profiles here.

new Phd students at Haas in a group photo in Chou Hall
(From back row left-right) Abdulmuttolib Salako, Ziyi Liu, Sean Chen, Sarah Danner,  Hanna Yu, Sara Shemali, Jordan Mickens, Nikita (Nick) Akimov, Wenxiao Yang, Srikanth Janjirala, Yutao Chen, Maggie Ye, Skyler Chen, David Gravanita , William Zhang, Zi Yang Chen, and Nathan Godin. Missing from photo: Nick Otis, and Fikremariam (Fikre) Gedefaw. Photo: Jim Block

Out of the Blues

Haas alumni work to destigmatize mental illness and improve well-being.

In the fall of 2020, deep into the pandemic, Newton Cheng, MBA 08, was working harder  than ever. By early 2021, he knew something was wrong. He was spent, exhausted, unable to feel happiness or joy. One morning upon waking he was filled with so much dread that he couldn’t get out of bed.

As the director of health and performance at Google, Cheng oversees programs that promote well-being in Google’s global workforce. But despite his job description and an appreciation of the importance of physical and mental health, he wasn’t immune to his own mental health challenges. So in January 2022, he opted to take a three-month leave to address his depression and anxiety. “My therapist called it ‘overwork syndrome,’” Cheng says. It was affecting all aspects of his life, including his most important relationships. “I was ashamed of the way I was showing up as a husband and father.”

Time away gave him the space to recalibrate, yet he knew his situation was hardly unique. According to Microsoft, over 50% of us globally are burned out at work. Another survey by McKinsey says that 59% of the global workforce reports having at least one mental health challenge.

After returning from leave, Cheng decided to publicly share his story. Doing so didn’t come naturally to him, but he put aside his discomfort and posted about his experience on social media. He got positive responses on Facebook and Instagram, but by far the largest response was within his professional network on LinkedIn. “The post received roughly 2,000% more engagement than my previous posts,” he says. 

Indeed, if the COVID-19 pandemic has any silver lining, it may be the way it’s revealed some of society’s long-simmering ills, one of which is the state of our mental health. Long a taboo subject in general—and in the workplace in particular—the trauma and disruption of the pandemic brought mental health out of the shadows and positioned it front and center. 

Fortunately, members of the Haas community have long recognized problems in the way we talk about mental health and in the systems we use to provide care. And they’ve put their energy into trying to solve them. 

Changing the culture

Ian Shea, BCEMBA 07, learned firsthand how important it is to tend to one’s own mental health when a company he started didn’t pan out. The experience was emotionally taxing, and he was dogged by fear, anxiety, and doubt. “To get through that, just for my own personal survival, I really had to develop my own emotional and spiritual practice,” he says. But like Cheng, Shea knew his experience wasn’t unique and that others had gone through similar trials—or would at some point. He realized that creating space at work for more emotional support and open dialogue would be a good thing for people and for businesses. But they needed guidance. 

So Shea created I M Human to provide that guidance to companies that have decided to make well-being a strategic priority. This is more than simply implementing a program, he says. “It’s a practice. Culture is at the heart of it. It’s how leaders treat their employees, how they give feedback, and how they create space for self-care.” The goal is broad culture change within companies, so well-being becomes a core part of their values. 

Shea’s company was brought in by global law firm O’Melveny & Myers after the American Bar Association reported high rates of depression, anxiety, and loneliness in the legal profession and created the ABA Well-being Pledge. The firm, says Shea, has since been awarded the #1 well-being program in the legal industry, in part because of its work with I M Human.

A challenge to find new ideas

Smiling emoji faces spilling out of a cell phone. According to Gallop’s 2022 State of the Global Work Force, a mere 21% of employees said they were engaged at work, and just 33% said they were thriving in their overall well-being. While no field has a monopoly on unhappiness, Michael Martin, MBA 09, discovered that construction workers have one of the highest suicide rates across all industries. Martin works in energy, infrastructure, and sustainability at Google, and he regularly visits construction sites, so the issue was more than academic. 

He shared what he’d learned with senior leaders at Google. “Clearly,” says Martin, “if we’re dealing with these issues on site, this was going to result in project delays and money lost. But beyond that, there’s a moral imperative to make the sites a better place to work.”

By way of a solution, in 2020 Martin founded the John E. Martin Mental Healthcare Challenge at Haas, seeded with his own money and sponsored by Google. The annual case competition aims to develop solutions to improve the quality of mental healthcare and access. In its inaugural year, 12 teams from top MBA programs proposed ways to use data to better support construction workers facing anxiety, addiction, depression, and suicide. The winning solution—from a Berkeley Haas team—featured an AI-powered app that addressed prevention, assessment, and intervention. 

Martin had already made a commitment to improving mental health via his Berkeley connections. In 2015 he founded the John E. Martin Fellowship in honor of his father, a Vietnam veteran who overcame his own mental health struggles and became a counselor to fellow vets. The Martin Fellowship provides financial support to students at Haas, the School of Public Health, and/or the School of Social Welfare. The Healthcare Challenge further elevates the importance of addressing mental health for all members of society.

Julia Cohen, MBA/MPH 24, was a member of the prize-winning team at the 2022 Mental Healthcare Challenge, when the focus was adolescent health. Cohen and her teammates developed an intervention designed for rural transgender youth called Y’ALL. Says Cohen, “Y’ALL seeks to build community and foster resilience through both digital technology and a rotating in-person neighborhood pop-up event.”

According to Microsoft, over 50% of us globally are burned out at work. Another survey by McKinsey says that 59% of the global workforce reports having at least one mental health challenge.

Cohen’s team focused on transgender rural adolescents because the unmet need in that population is so great. “Rural trans youth have higher mental health incidents. Suicidal ideations are higher, and access to mental health resources is limited,” Cohen says. Y’ALL’s emphasis is on building community, with a focus on preventing mental health issues rather than waiting until serious problems take root.  

One hand grasping another to pull out of a hole.Reaching young people

Transgender rural youth face unique challenges, but the incidence of anxiety and depression among all young people has been on the rise. Rates were increasing well before the pandemic, but COVID’s disruptions and enforced isolation only made things worse.  

Addressing mental health issues as early as possible is key, says Anjali Menon, BS 11. “The majority of mental illness begins by age 24 or before. So you really have to start early,” she says. In 2021, Menon co-founded tbh, a resource that partners with schools—both K-12 and higher ed—to supplement the mental health services available to students. Menon was motivated to start tbh when she saw the inadequate options available to a college-age friend who was struggling with mental health issues.  

“I’m trying to model a different way of leading. I’m showing up more vulnerably, and I’m creating space for others to share their stories.”
—Newton Cheng, MBA 08 

Her company facilitates online skills-based, therapist-led groups that help students build a social-emotional toolkit. As with Cohen’s project Y’ALL, the emphasis is on prevention, giving young people the skills to tend to their own well-being. Menon says the groups allow students to connect with mental health experts in a way that feels friendly. And she says students really appreciate the group format. “It helps them see their problems reflected in other people, and they feel less alone,” she says.

Stigma and other barriers

Attitudes concerning mental health issues are gradually changing, but stigma persists and often serves as a barrier to seeking care. This is particularly true in communities of color, says Karan Singh, BS 05. “My family’s originally from India, and this is definitely not a topic you talk about in many brown communities,” he says. “It wasn’t in our house.” Looking back, Singh suspects this is why he was blindsided when a family member tried to take their own life some years ago. “None of us knew this person was struggling,” he says.

Yet even in the absence of stigma, problems of access remain. “Most people trying to see a provider wait weeks if not months,” says Singh. And once you find someone, the quality of care varies dramatically. And then there’s the issue of cost. Many providers are out of network, so payment is out of pocket, putting help out of reach for many. To address some of these problems, in 2011 Singh and his partners founded Ginger, one of the first online clinics to provide on-demand mental healthcare. 

In 2021, Ginger merged with Headspace, the popular mindfulness meditation app, to become Headspace Health. Singh says that adding mindfulness to Ginger’s other clinical services has allowed them to provide a full care continuum and now touches the lives of more than 100 million people in 190 countries. Their solutions Headspace for Work and Ginger are distributed through more than 4,000 enterprises, including Starbucks, Adobe, and Mattel, and through health plans such as Cigna—a true sign that mental health treatment has moved from the back room to the boardroom.

Like Singh, when Brad Kittredge, MBA/MPH 09, looked at the mental healthcare landscape, he saw lots of problems. One of the major issues he’d identified in healthcare delivery was routinization. “Our healthcare system has been treating depression or anxiety as one thing when in fact they’re complex, heterogeneous conditions,” he says. “And the reality is that the traditional care model hasn’t gotten good outcomes that way.” 

In 2017, Kittredge co-founded Brightside Health, which provides evidence-based and personalized online therapy and medication management from licensed practitioners. One of Brightside’s innovations is using data to understand each person’s unique presentation then analyzing that data to make targeted prescribing suggestions to doctors. Kittredge says they’re getting measurably better outcomes. One study comparing Brightside’s approach to treatment as usual found that close to 80% of Brightside patients experienced a reduction of five or more points on a depression assessment, compared to 52% of patients treated as usual.

Last December, in response to rising suicide rates, Brightside launched a first-of-its-kind telehealth program to treat people at an elevated risk for suicide. The program is rolling out nationally, and Kittredge says they’ve begun collaborating with health systems and health insurance companies on suicide risk-reduction programs.

The public good

While some in the Haas community are creating new ways to deliver mental healthcare, Alyssa Zachariah, MBA 22, is helping to implement existing public health services for thousands of San Franciscans. Zachariah works for San Francisco’s Department of Public Health and manages the budget for the Mental Health Services Act. 

The MHSA, passed in 2004, levies a 1% tax on incomes over $1 million and distributes those funds to counties for mental health services—which cover everything from prevention to treating serious illness. The $50 million fund currently supports 87 programs in San Francisco. But because funds are tied to income tax, there’s a lot of volatility, which makes Zachariah’s job complex. 

Initially Zachariah wanted to be a mental healthcare provider, but she found she was more interested in the systems that help deliver services. “I felt like I was contributing toward a larger system that was doing incredibly important work for a population that other institutions aren’t necessarily motivated to serve,” she says.

Developing better ways to provide mental healthcare and enabling people to tend to their own well-being are enormous challenges. But solutions are out there—many devised by Haas alumni. Admittedly, some are easier to institute. Google’s Cheng, for example, is continuing to use his experience with depression and anxiety to help spark change. “I’m trying to model a different way of leading. I’m showing up more vulnerably, and I’m creating space for others to share their stories,” he says. 

But Cheng and others agree that more is needed. “Change isn’t going to happen unless we change the systems around us,” Cheng says. And that includes not only our systems at work but the way we treat mental health more broadly. Cheng sees this as a challenge for the Haas community, for whom doing good is woven into the culture. “What do we want to do as a community to address this?” he asks.

Management strategy makes a difference in C-section rates, study finds

Portrait of pregnant woman with doctor in clinic
Photo: Adobestock

For physicians, it seems like a no-brainer: Management experts, often private equity firms, offer to take over the logistical and financial drudgery of their practices, leaving the doctors to focus on patient care.

A new Berkeley Haas study found that the business strategies used by physician practice management companies (PPMCs) also impact patient care.

The study, published in the journal Management Science, examined the strategies adopted by PPMC-owned obstetrician and gynecologist practices and found they influenced rates of Cesarean sections for low-risk patients.

Specifically, OB-GYN practices acquired by PPMCs that focus on patient and clinical management lead to significantly lower rates of C-sections. PPMC-owned practices that focus on providing financial management services lead to higher C-section rates.

“Even though PPMCs say they preserve physician autonomy, managerial changes do appear to influence physician treatment choices,” said study author Ambar La Forgia, an assistant professor at the Haas School of Business, UC Berkeley.

Value-based management vs financial management

La Forgia tracked three PPMC-owned practices that together accounted for more than 40% of Florida’s OB-GYNs between 2006 to 2014. One PPMC focused on attracting “value” based contracts, which link payment to clinical performance by providing clinical management services, while two focused on raising revenue by providing financial management services and negotiating higher-paying fee-for-service contracts, which link payment to quantity of services.

C-sections are more profitable than vaginal births because insurance companies typically pay out more in reimbursements. So a rise in the number of C-sections can raise a red flag, causing doubts about whether some of those performed on mothers at low risk for childbirth complications are necessary. Unnecessary C-sections can increase risks for both mother and infant in a myriad of ways.

Divergence in C-section rates

La Forgia found a remarkable divergence: The OB-GYN practice that focused on clinical management cut C-sections for low-risk women by 22%. Those that focused on financial management showed a 10% to 11% rise in C-sections.

“What surprised me was finding that one of these for-profit management companies lowered C-sections,” La Forgia said. “It’s a pleasant surprise that leads to a more nuanced story to tell, because you can’t make a blanket statement about PPMCs.’”

La Forgia turned to Florida to track how physician practices performed after a PPMC takeover because public information laws include hospital discharge records that allowed her to link patient records to individual doctors and practices.

Low-risk mothers

The study concentrated on records for 1.26 million women who were at low risk for C-sections (defined as single live babies born after 37 weeks to women with no prior C-section and in the vertex, or headfirst, presentation). The births were overseen by 1,693 physicians, with C-section rates of 24% for low-risk patients.

La Forgia also hand-collected marketing materials to track and parse the details of a PPMC’s management approach. For example, the PPMC that focused on clinical management advertised providing clinical data tracking and analytics to help standardize care and attract value-based contracts. “This was a forward-looking strategy because it can take a while to improve quality and negotiate these types of contracts, especially since they were not very common within the time period of this study,” La Forgia said.

Another notable data point: the two financially managed PPMCs performed more C-sections on privately insured patients than those insured by Medicaid, the government insurance program that typically covers people with lower incomes. Florida, La Forgia notes, is one of the few states where Medicaid reimburses physicians at the same rate for C-sections and vaginal births.

Growing influence of PPMCs

In today’s healthcare landscape, physicians generally have the option to keep running their own practice, sell to a hospital, or sell to a PPMC. Why choose a PPMC over a hospital? Autonomy, La Forgia said. Under hospital ownership, doctors typically become salaried employees of the hospital.

“PPMCs advertise themselves as an alternative to hospitals while still being relatively independent and getting to stay in private practice,” La Forgia said. However, “This research shows that even PPMCs claiming to preserve physician autonomy can alter clinical outcomes for better or for worse.”

The influence of PPMCs on patient care has only increased in the years beyond those covered by this study, La Forgia writes. By 2019, the three PPMCs she examined delivered roughly 1 in every 25 babies in the United States.

“Although I find that PPMCs influence C-sections regardless of changes in competition, the PPMCs do amass considerable market power, and their growth may eventually lead to more salient anticompetitive effects,” La Forgia writes in the study.

La Forgia noted that in recent years there’s been a noticeable shift in philosophy among some PPMCs to pursue value-based contracts over fee-for-service contracts.

“In fact, a lot of the [PPMCs] that originally billed themselves as financial management companies have changed their offerings to focus more on population health once they saw that this is a potentially lucrative angle,” she said. “That may be a good sign for patients.”

Read the full paper:

The Impact of Management on Clinical Performance: Evidence from Physician Practice Management Companies
By Ambar La Forgia
Management Science, November 2022