Technology as a solution: promises and pitfalls
Advanced medical technology has allowed us to extend our life span and generally live more fulfilling and flourishing lives. However, the benefits of novel medical technology have not been experienced equally across all races and genders. Instead, some of these novel tools have had unintended harmful consequences for both people of color and women.
For example, it was discovered that an algorithm used on more than 200 million people in the U.S. to predict which patients needed additional healthcare services systematically discriminated against Black patients. The algorithm underestimated the severity of Black patients’ medical conditions and prioritized treating white patients with additional healthcare services over Black patients even though they had equivalent health conditions.
Precision and personalized medicine, lauded as being a revolutionary approach to healthcare, is less accessible to the Black, Latino, and Indigenous communities because of a lack of genomic data on non-white patients. Research has also revealed that women, especially women of color, are more likely to experience adverse medical outcomes from medical technologies. Of over 340,000 medical device-related injuries or deaths reported to the Food and Drug Administration, 67% of the patients were women.
Design and Development Divide
The healthcare predictive algorithm is just one example of how racial blind spots in the development of the algorithm actually amplified racial biases over a large group of people and worsened healthcare disparities for Black patients.
The medical implant industry is another illustration of how the effects of bias can be magnified through technology design. For instance, a popular hip replacement implant was more than twice as likely to fail in females than in males despite being indicated as gender-neutral because the device developers did not take into account how hip movement differs between the males and females.
A crucial problem, and one prevalent across countless industries, is the lack of racial and gender representation in the key decision makers of medical device and healthcare companies. At the early stage, Black Americans represent only 8% of leadership teams in digital health startups and the larger the company gets, the less likely you are to see Black representation in the leadership.
In fact, only one Fortune 500 healthcare company, Merck, currently has a black CEO. While women make up 70-80% of the healthcare workforce, only 20% of leadership roles in large medical device companies are filled by women. Zooming out, when considering healthcare more broadly to include medical and pharmaceutical companies and healthcare providers, women of color make up only 4% of the C-suite positions.
Considering that Black women are 3-4 times more likely to die from pregnancy, twice as likely to experience infertility compared to white women, and underrepresented in clinical trials that require consent while also being overrepresented in studies that do not, this number is remarkably unacceptable.
Unique problems require unique solutions
Minority and women founders are uniquely capable of providing solutions for the numerous unmet needs in the healthcare industry and data has shown us there is no shortage of talented pipeline. Unfortunately, both minority and women founders face incredible financial hurdles that make it difficult for them to grow and scale their companies.
Black and Latin founders receive less than 3% of venture capital dollars, even though they are the fastest growing demographic of founders in the U.S. Although women make up 80% of the healthcare decisions in a household and are more likely to utilize digital health technologies compared to men, only 3% of digital health deals go to women’s health startups.
When compounding both gender and race, Black female founders raised only 0.06% of total venture capital dollars going to tech in from 2009 to 2017, meaning the amount of dollars going to Black female founders in the MedTech space is astronomically lower.
However, research has shown us time and time again that diversity actually leads to 30% higher returns on investments compared to companies with white-only founding teams. Teams with at least one female founder outraised male-only founding companies and had more favorable exit opportunities.
The lack of early access to capital means that minority and women founders have to bootstrap their companies for longer periods of time and take on greater risks compared to white founders. Importantly, an incredibly large market, primed for innovation, remains untapped.
Filling the Gap
If minority and women founders in the medical device and healthcare industry are not being supported a large percentage of Americans will continue to operate within an inefficient healthcare system that does not adequately fulfill their needs. Investors need to realize the massive market potential in the MedTech Industry, specifically geared towards minorities and females.
Angel Investors are perfectly suited for filling the gap of initial funding female and minority founders need to kick start their companies. However, there is still a need for activating more diverse angel investors who can realize the market opportunities unseen or unappreciated by traditionally white-male investors. When we increase the diversity of the people who get to decide what gets funded, we ultimately diversify the startups that are allowed to grow and thrive.
At Business Angel Minority Association, we are working to activate more diverse investors, as well as educate current investors on the benefits of investing in minority-led startups. It is our mission to make the innovation ecosystem one that is equitable, diverse, and inclusive and we believe that that starts with empowering people from diverse backgrounds to make the decisions of what problems need to be solved in their communities.
baMa Investor Relations Manager