Richard F. Averill is Principal Consultant at The Hesperium Group and a pioneer in linking the financial and clinical dimensions of healthcare through innovative payment designs. As Director of Health-Related Research at the Yale School of Management (1972–1981), he was one of the developers of the Diagnosis Related Groups (DRGs) and the case mix cost accounting system that became the foundation for Medicare’s Inpatient Prospective Payment System (IPPS). He served as chief consultant to New Jersey on the nation’s first DRG-based payment demonstration and was the primary contractor to CMS for the nationwide implementation of the DRG-based IPPS.
Averill subsequently founded Health Systems International, which was acquired by 3M Health Information Systems in 1990. At 3M he served as Senior Vice President of Clinical and Economic Research and oversaw major initiatives for CMS such as the design and implementation of the Ambulatory Payment Classifications (APC) based Outpatient Prospective Payment System (OPPS). For CMS he also led the development of the ICD-10 Procedure Coding System and the Medicare Severity DRGs. For 3M he developed many widely used patient classification systems such as the All Patient Refined DRGs (APR DRGs) and Clinical Risk Groups (CRGs).
Following his retirement from 3M in 2016, Averill founded Hesperium where he has focused on the development of payment systems that strike a balance between cost and quality by creating financial incentives for reducing quality failures such as complications, readmissions, and misalignment of resources (under use of outpatient surgery). He has advised Medicaid agencies and commercial insurers on integrating quality-based adjustments into reimbursement systems.
He has been recognized multiple times by Modern Healthcare as one of the “100 Most Influential People in Healthcare” and has testified before Congress. Averill has been a frequent speaker and has authored more than 80 publications on healthcare policy and management.