The digital health field saw an increase in women leadership in 2019, but the pace of change remains relatively slow, according to a new Rock Health report.
Across the board the percentage of female executives at Fortune 500 health care companies, female partners at venture funds active in digital health and the deals closed by women-led digital health companies have all increased.
However, the percentage increases are small. For example, female partners at digital health VC firms only rose from 12.2% to 12.6%, while deals closed by women-led startups rose 13.4% to 14%.
Some areas are doing better than others. The number of women executives at the largest 100 hospitals has risen from 34.5% to 37.1% year over year. Women account for 32.7% of Fortune 500 healthcare companies executives, up from 21.9% last year.
Rock Health created multiple simulation models of what would impact gender balances, each of which suggest that parity will be a long time coming.
“If, starting now, 50% of all newly-hired healthcare VC partners are women, it will take 94 years to reach 45% women partners and 132 years to reach 48% (due to the asymptotic nature of the curve, it will take longer to make incremental progress as women representation approaches the 50% threshold),” the authors of the report wrote. “The outlook for F500 healthcare executive teams and boards is similar — executive teams will wait 77 years to reach 45% women in leadership, while boards will wait 72 years.”
Despite the current representation gaps, Rock Health found that 80% of female responders working at a healthcare startup or VC fund said they thought they would see gender parity within 25 years. Men, however thought that the gaps would be closed quicker, with 54% of men saying they think the gap will be closed in ten years.
WHY IT MATTERS
Diversity in the work place has been shown to not only improve culture but also help the bottom line.
Researchers found that hiring more women onto a VC team can be a smart money move — it is associated with improved fund returns and profitable exits, according to Harvard economists Paul Gompers and Silpa Kovvali.
“Diverse teams realize superior financial performance and are better able to innovate and attract and retain the best talent," authors of the report wrote. “In the startup space specifically, companies with women on their founding teams are likely to exit one year faster compared to the rest of the market.”
THE LARGER TREND
Rock Health has conducted this survey for some time. Last year the findings were similar with only 10.2% of CEOs at digital health startups being women, which was an increase from 8.8% in 2015. The same trend is evident among partners at digital health VC firms, where only 12.2% of partners are female.