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Steve Yahn

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at riskletters@lrp.com.

Substance Abuse

This Is Your Doc On Drugs

Addicted health care professionals are part of the national issue of prescription drug abuse, but the hardest to find and treat.
By: | October 15, 2014 • 7 min read
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About 10 years ago, when Johnson City, Tenn., physician Stephen Loyd was practicing internal medicine, often in an intensive care unit, he was popping about 100 opioid pills a day, every day, ingesting mainly oxycodone and Vicodin.

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“You’d think that if a person was taking 100 pills a day like that others would know,” Dr. Loyd said. “But six weeks before I went into rehab, I stood at a medical students’ graduation ceremony where I was honored as one of 10 faculty members out of 100 who had the most influence on the students’ previous four years of education.”

Today, a recovering addict, Dr, Loyd is the 2014 Advocate for Action for the White House’s Office of National Drug Control Policy.

The scariest thing about his heavy drug addiction, Loyd said, “was that I thought I was a better doctor. I thought I was sharper, that I didn’t need to sleep, that I didn’t need to eat. I thought I could go longer and see more patients.”

In fact, his condition was worsening, though none of his colleagues wanted to question it.

Dr. Stephen Loyd, 2014 Advocate for Action for the White House’s Office of National Drug Control Policy

Dr. Stephen Loyd, 2014 Advocate for Action for the White House’s Office of National Drug Control Policy

“Nobody said anything to me,” said Loyd, who is now chief of medicine at the Mountain Home VA Medical Center. “They didn’t want to hurt my livelihood; they didn’t want to hurt my practice.”

Finally, it was his father who intervened on his behalf. “The truth of the matter was that I was going to die,” Loyd said. “And not only that, but there was the possibility of hurting a lot of people. Now, it makes me sick to think of the damage I could have done to other people.”

Today, in addition to his work with the White House and his practice, Loyd lectures on the dangers of drug abuse in the medical profession.

Epidemic of Abuse

Almost every day, medical professionals in the United States — from doctors to nurses to pharmacists — are censured for narcotics abuse, resulting in harm to themselves and sometimes, their patients.

These individual actions are part of what the Centers for Disease Control and Prevention has classified as a national epidemic of prescription drug abuse.

Video: Dr. Stephen Loyd talks to USA Today about his addiction.

According to the latest figures from the CDC, one in 20 people aged 12 or older has used prescription painkillers for non-medical reasons, and more than 2.1 million people in the country are addicted to opioid painkillers.

Prescription painkiller abuse is estimated to cost the United States more than $125 billion annually.

Consumer Watchdog, a California citizens’ advocacy group, said it examined federal data on the combined problem of alcohol and drug abuse by medical professionals and determined that 500,000 medical professionals in a given year self-report that they abused alcohol, prescription drugs or illicit drugs.

“This is according to federal data and yet we don’t have any way to detect this,” according to Consumer Watchdog. “We don’t have any way to stop doctors and other medical professionals from this activity.”

State-Level Oversight

Several factors contribute to a prescription painkiller epidemic in the health care field, said Joanna Shepherd-Bailey, a professor at Emory University School of Law in Atlanta.

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“A few rogue physicians and pharmacists enable drug abusers by illegally prescribing or supplying controlled substances,” said Shepherd-Bailey. “Other physicians do not have adequate training to recognize and address prescription drug abuse, and as a result, prescribe painkillers to illegitimate patients.”

Substance abuse among physicians, nurses, dentists and pharmacists can affect their personal lives, but it often is also linked to medical errors, liability and a decline in patient safety.

To counter such abuse, Minnesota Gov. Mark Dayton signed a new law in May that will tighten oversight of problem nurses and other licensed health care providers.

Provisions include requiring employers to report nurses who have stolen drugs, and requiring the state drug monitoring program to provide more data to the state Nursing Board about nurses who have harmed patients and stolen drugs.

Video: From 2003-2007, one-quarter of nurse disciplinary issues were traced to drug abuse in Nebraska.

One crucial aspect of the new legislation is tightening regulations to make it easier for health licensing boards to immediately suspend a health care worker if the board believes the person “presents an imminent risk of harm.”

“We did as much as we thought we could because legally, of course, a person has due process so there has to be a balance between a person’s right to due process and the need of the public to be safe from persons who might not be safe practitioners,” said Rep. Tina Liebling, D-Rochester, a key architect of the legislation and chair of the state’s House Health and Human Services Policy Committee.

“We did tighten things up considerably. We put in an immediate review by the board and also language that says if there’s an imminent risk of harm, they must temporarily suspend a person’s license.”

Federal Action

On a national level, the federal Drug Enforcement Administration (DEA) has proposed new restrictions that would change regulations for some of the most commonly prescribed narcotic painkillers.

The DEA proposal, open for public comment since March, would specifically affect hydrocodone-combination pills, also known as opioids, which combine hydrocodone with less potent painkillers such as acetaminophen.

Under the proposed regulations, patients would have to have a written prescription from a doctor — instead of a prescription submitted orally over the phone. Also, refills would be prohibited. Patients would have to check in with the doctor to get another prescription.

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Drug-abusing health care professionals, however, can be harder to detect and deter. According to the National Council of State Boards of Nurses, “Although a drug user would usually tend to experience a decrease in work performance, or might be frequently absent, health-care professionals who are abusing drugs tend to not show impairment related to job performance until they have already developed a significant substance abuse problem.”

Detecting Abuse

Numerous state governments have what are called Prescription Drug Monitoring Programs (PDMPs). But according to Emory University School of Law’s Joanna Shepherd-Bailey, many of the programs suffer from inadequate data collection, insufficient interstate data sharing and constraints on sharing data with law enforcement and state agencies.

By contrast, third-party prescription payment systems run by pharmacy benefit managers (PBMs) or health insurers have been effective in dealing with prescription drug abuse by health care professionals.

Drugs paid for with cash are not processed by PBMs or insurers, allowing drug abusers, including health care professionals, to evade detection.

However, these systems do not currently process all painkiller prescriptions. Drugs paid for with cash are not processed by PBMs or insurers, allowing drug abusers, including health care professionals, to evade detection.

Shepherd-Bailey said that a national drug reporting plan building on existing PBM networks that are augmented to record cash purchases could be significantly more effective than existing state PDMPs in detecting prescription drug abuse by health care professionals and others.

“Such a system would close the current loophole for cash transactions and interstate purchases of prescription drugs,” Shepherd-Bailey said. “Moreover, by utilizing existing PBM systems, including data mining and advanced analytics, it could detect and deter potential drug abuse.”

Treatment Options

Though legal action is sometimes necessary, the health care profession generally aims to provide treatment rather than rely on disciplinary action to achieve recovery.

In 1982, the American Nurses Association created a resolution which urged states to create “peer assistance programs” for health care professionals as an alternative to discipline.

Since the early 1980s, all of the major professional nursing associations have advocated alternative-to-discipline programs prior to initiating more formal disciplinary proceedings.

This way, health care providers are able to focus more on treatment services rather than worry about losing their position as health care professionals.

Since the early 1980s, all of the major professional nursing associations have advocated alternative-to-discipline programs prior to initiating more formal disciplinary proceedings.

These organizations recognized that more supportive recovery efforts help keep valuable nurse practitioners in a profession facing catastrophic labor shortages.

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Despite these recommendations, not all states have implemented alternative programs and there is little consistency in the approaches they use.

Another important part of successful treatment includes the use of self-help groups, such as Alcoholics Anonymous or Narcotics Anonymous, which allow for individuals to talk about their addiction stories while surrounded by a supportive group of people.

Health care professionals may also take advantage of employee assistance programs to receive individual and confidential assistance concerning issues of overcoming substance misuse in the workplace or at home.

Experts noted the need for individualized treatment. While some people may just need support from self-help groups, others may need in-patient treatment time and a change in profession to overcome their dependence on drugs.

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at riskletters@lrp.com.
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Brokerage

On the Fast Track

EPIC is rapidly becoming one of the largest retail insurance brokers in the U.S.
By: | October 15, 2014 • 5 min read
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From its starting point in 2007, San Francisco-based Edgewood Partners Insurance Center (EPIC) is rapidly becoming one of the largest retail insurance brokers in the United States.

With initial funding from Stone Point Capital, the company’s founders received additional investment from the Carlyle Group in 2013.

John Redett, managing director, financial services, The Carlyle Group

John Redett, managing director, financial services, The Carlyle Group

With more than $175 million in revenue projected by the end of 2014, up from $75.l million in 2013, EPIC ranks among the top 20 retail insurance brokers in the country, and the company’s growth plan calls for an increase in revenue to more than $250 million by 2018.

Currently EPIC, a retail property and casualty insurance brokerage and employee benefits consultant, has more than 620 employees operating in California, Colorado, Connecticut, Georgia, Illinois, Massachusetts, New Jersey and New York.

In the past nine months, EPIC has made four acquisitions that added $50 million in annual revenue. Those acquisitions were:

• The McCart Group of Atlanta, one of the largest privately held insurance and risk management firms in Georgia, acquired on Jan. 9.

“As a 43-year-old company, The McCart Group had been approached many times over the years with offers to sell out to other, larger organizations,” said Jeff McCart, president of the company.

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“Before EPIC, we were never seriously interested. But when John Hahn and Dan Francis (EPIC’s California-based co-founders) introduced their vision to build a national brokerage comprised of firms with specialized expertise who want to share their collective knowledge and resources to compete against the largest brokers, it was a game changer,” he said.

(Francis announced on Oct. 14 that he was leaving the company “to begin a new journey outside of insurance that will afford me the opportunity to further ‘give back’ and focus on some personal interests/worthy causes that have meant a lot to me over the years.”)

• On Jan. 21, EPIC announced it acquired the program business of Boston-based Altus Specialty Group.

• On July 22, the shareholders of Jenkins Insurance Services sold 100 percent of their shares to EPIC. Jenkins employs 160 people in Reno, Nev., and in California offices in Concord, Sacramento, San Jose, and Orange County.

• On Aug. 13, EPIC added the retail risk management and property/casualty team of Stamford, Conn.-based JLT Towers Re. This strategic build-out of a team serving large, complex risk management accounts is a product of EPIC’s broadening alliance, and partnership and collaboration with JLT/Towers Re.

“This team enhances EPIC’s risk management services and offerings for our middle market and upper middle market clients, expands our reach into the public entity sector and gives us additional depth to serve clients in metropolitan New York,” said EPIC co-founder and CEO John Hahn.

Future Growth

Derek Thomas, chief strategy officer, EPIC

Derek Thomas, chief strategy officer, EPIC

“The multi-prong approach of acquisitions and the aggressive recruiting of producers and service teams has enabled us to grow organically and strategically,” said Derek Thomas, chief strategy officer. “Our plan is to advance a similar model in key regions across the United States.”

Specific geographic areas eyed for growth potential include tier 1 and tier 2 cities in the Northeast, Mid-Atlantic, Midwest and Southeast, Thomas said.

“Our strategy is to maintain the local, client-specific success drivers of our new partners while providing them with access to broader national and global resources that can also be deployed for the benefit of their clients locally,” he said.

John Redett, managing director, financial services at The Carlyle Group, added: “We see tremendous opportunity for EPIC. Since we made our initial investment in late 2013, EPIC has already expanded its footprint into the Southeast and the Northeast, as well as bolstering its West Coast operations, product capabilities and client service strength.”

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Whether it comes through additional acquisitions, geographic expansion or product growth, Carlyle supports an expansion of EPIC’s business in its effort to become a major national player, he said.

Hahn said the launch of the brokerage’s new growth phase, EPIC 2.0, “is off to a roaring start and we think the prospects for achieving our goal of $250 million in revenue in less than the original five-year plan are very favorable.”

On the Fast Track

EPIC has been on a fast-track growth pattern ever since it was launched in California in 2007, when Stone Point Capital and co-founders Hahn and Francis committed $100 million to create the groundwork for the current EPIC organization.

From the start, the company has had an investment structure that provided key employees, producers, acquired principals and executive management the opportunity to hold significant equity ownership stakes in the firm, said Francis, who serves as executive chairman.

The newly formed, California-based company went from zero to approximately $80 million in revenue in less than seven years, with average annual organic growth rates in excess of 10 percent, Francis said.

About midway through 2012, Hahn and Francis began taking a hard look at the company and its future prospects.

John Hahn, co-founder and president, EPIC

John Hahn, co-founder and CEO, EPIC

“When all was said and done,” Hahn said, “we believed we could build a super-regional/national platform through maintaining our entrepreneurial approach; improving our product and service offerings by acquiring and attracting high-quality, specialized talent; and offering successful regional broker owners and operators an opportunity to partner with us to build a national brokerage and consulting firm.”

After a thorough examination of the investor universe over the course of 2013, it became clear to EPIC that The Carlyle Group would be its best option to provide it with the additional capital required to execute EPIC 2.0 as well as offer it significant revenue potential through access to Carlyle’s portfolio companies, Francis said.

Over the course of 2013, EPIC began to restructure the company and build out its infrastructure in order to support the growth and expansion it anticipated would be necessary to drive EPIC 2.0.

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“While doing so, we also began developing an M&A and talent pipeline that would serve as the foundation of our super regional strategy,” Hahn said.

The company’s first two non-California deals closed mid-2013 with the launch of a national real estate practice with Kathleen Felderman in Denver and Jonathan Griffiths in San Francisco, and a closing of a deal in New York with Safe Harbor, which brought another property and casualty, risk management, employee benefits and private client services consulting firm into the fold. Safe Harbor was led by Tom O’Neil, who is now EPIC’s West Coast region president.

Currently, EPIC has several new deals in due diligence and a robust acquisition pipeline, with other possible deals in various stages of discussion and evaluation, said Thomas.

“And we are actively looking for other potential partners,” he said.

“In addition to targeted geographic expansion,” Thomas added, “our plan is to identify and recruit production and service teams who have proven track records in growth oriented industry sectors.”

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at riskletters@lrp.com.
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Public Sector Risk

Capturing the Moment

Video technology is being used more frequently by municipalities to reduce liability involving police activities
By: | October 8, 2014 • 6 min read
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In Ferguson, Mo., most recently, but in a growing number of situations, citizens are using their cellphones to capture videos of police officers in action.

Often, those videos offer negative portrayals, but more and more, police departments are using similar technology to demonstrate their professionalism and protect their reputations.

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“We may have reached the point where video technology is producing a full-fledged revolution in policing,” said Jay Stanley, senior policy analyst with the American Civil Liberty Union’s speech, privacy and technology project.

“That revolution has been crystallized, or at least revealed by, the events in Ferguson. The first element of that revolution is a growing expectation among Americans that any dramatic event that takes place in public will be recorded on video.”

“We may have reached the point where video technology is producing a full-fledged revolution in policing.” — Jay Stanley, senior policy analyst, American Civil Liberty Union

In reality, dramatic events may be dwarfed by the mundane day-to-day routine, but body-worn cameras (BWCs) are being used by a rapidly growing number of police departments around the country. Such use has, among other things, proven a boon to reducing liability suits brought against police departments.

Use of BWCs reduced the use of force incidents by 59 percent at the Rialto, Calif., police department in the year after it introduced its program in 2012, while reducing citizens’ complaints by 87.5 per cent, said Police Chief Tony Farrar, who added that he was convinced there was a direct connection between these dramatic declines and the introduction of BWCs.

Proponents of body-worn cameras by police officers say they protect officers from false accusations, reduce agency liability and citizen complaints, and provide evidence for use in court.

A study sponsored by the International Association of Chiefs of Police noted that 93 percent of police misconduct cases where video was available resulted in the officer’s exoneration; 50 percent of the complaints were immediately withdrawn when video evidence was used, and 94 percent of citizens supported the use of video.

Steve Tuttle, a founding team member of TASER International, observed in PoliceOne.com: “The biggest issues that body-worn cameras can solve are reducing litigation and complaints while increasing officer efficiency. Ultimately it reduces the he said/she said, which saves communities money in meritless complaints.”

Video saves time, money and sometimes officers’ jobs, added Michael Millhollen, marketing specialist at Digital Ally, Inc., whose products include the FirstVu officer-worn or mountable video systems.

“Faced with the knowledge that an incident is on video, most complaints against the agency are dropped and many prosecution cases are uncontested or expedited,” Millhollen said. “That equates to less investigating allegations as well as reduced expenses from lawsuits and insurance.”

Unanticipated Exposures

Joshua Gold, head of the cyber insurance recovery group, Anderson Kill P.C.

Joshua Gold, head of the cyber insurance recovery group, Anderson Kill P.C.

While early statistics indicate that BWCs are a promising effective risk management tool, like a lot of technological innovations, they can create unanticipated problems, said Joshua Gold, head of the cyber insurance recovery group at Anderson Kill P.C., a NYC-based national law firm specializing in insurance recovery.

“For example, if these cameras capture images of people who are innocent and uninterested in any type of publicity but nonetheless get caught up in unflattering video footage, you could see legal defense coverage costs coverage, at a minimum, being implicated and important to cash-strapped municipalities,” said Gold.

Even something as heroic as officers helping to deliver a baby could arguably constitute an invasion of privacy if the video footage ended up posted to the Internet or lampooned on late-night cable programming, he noted.

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“As such, while the BWCs may reduce liability exposure for certain types of risks like bodily injury claims and false arrest claims, they could arguably lead to other exposures dealing with privacy, false light and emotional distress from alleged public humiliation,” Gold added.

“Personal injury and media liability-type insurance coverage would become more valuable if these risks were to pan out.”

Another challenge is how best to store the video footage, whether it is done by the police department or an outside provider.

“Agencies often overlook the need to securely store, manage and retrieve their digital evidence after it has been captured,” said Tuttle.

“To provide the most value, agencies ensure they have a robust plan and service to facilitate data storage, management and retrieval,” he said. “The focus on cameras often makes the back-end solution an afterthought when it is just as crucial, if not more, than the cameras.”

Marilyn L. Rivers, director risk and safety, and compliance officer for the City of Saratoga Springs, N.Y., added: “A high degree of responsibility exists to ensure these videos recorded by police shoulder-cameras and police dash-cams are appropriately kept safe with stringent administrative policies for privacy and management.

Marilyn L. Rivers, director risk and safety, and compliance officer, City of Saratoga Springs, N.Y

Marilyn L. Rivers, director risk and safety, and compliance officer, City of Saratoga Springs, N.Y

“We always want to make sure we don’t have a group of people standing around a computer laughing at a silly puppy video for lack of a better [example],” Rivers said.

Rivers underscored the vital role of privacy in the use of body-worn cameras. “Risk management folks across the country are constantly trying to equalize the safekeeping of our communities while we maintain the balance of an individual’s right to privacy,” she said.

Police officers are always trying to manage that invasion of privacy while still providing protection, she said.

While it’s still too soon for the City of Saratoga Springs to statistically measure results of its camera program, the videos have been helpful in recording the behavior of the folks the police engage with, Rivers said.

“It supplements our law enforcement program and is particularly helpful where we have cameras in downtown areas that are trouble prone,” she noted.

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With the wealth of individual camera phones within the community, the shoulder cameras record what the officer experiences from his viewpoint as he deals with various situations, Rivers said.

“It allows a comparison of multiple viewpoints for the same occurrence,” she said. “It also serves as an official recording of what may or may not have happened in any given situation. As a police officer in the face of a potential of multiple cameras recording his or her every move, it is a use of technology that is helpful to his or her workday.

“I would say that it has added to our defense mechanisms as we give those videos to the district attorney’s office when they prosecute cases.”

“Historically, liabilities for allegations of assault, false arrest, wrongful imprisonment, trespass and the like are all covered under standard form insurance liability policies purchased by such entities.” — William G. Passannante, co-chair, insurance recovery group, Anderson Kill

Anderson Kill’s William G. Passannante, New York-based co-chair of the firm’s insurance recovery group, said that state and municipal government entities regularly purchase liability insurance that covers the liability asserted on account of the actions of their police officers.

“Historically, liabilities for allegations of assault, false arrest, wrongful imprisonment, trespass and the like are all covered under standard form insurance liability policies purchased by such entities,” said Passannante.

The apparent reduction in claims in Rialto, Calif., suggests that BWCs could be part of a loss control program supported by insurance underwriters, he added.

“Liability for ‘misuse’ of BWC, such as in a claim for violation of privacy, is at least possible and would very likely be covered by existing insurance policies,” said Passannante.

“Of course, the regulatory scheme under which BWCs are introduced would be expected to address such issues, and I would expect police departments to request certain ‘safe harbor’ provisions regarding the use of camera footage they are required to record,” he noted.

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“The most obvious benefit from wearing BWCs,” said Eugene P. Ramirez, Senior Partner at Los Angeles-based Manning & Kass, Ellrod, Ramirez, Trester LLP, “is that law enforcement will be seen as being more transparent and holding itself out as more accountable.

“The use of BWCs will also assist exonerating officers who are targets of citizens’ complaints, and, hopefully, will reduce the number of lawsuits against a department,” he said.

Steve Yahn is a freelance writer based in Croton-on-Hudson, NY. He has more than 40 years of financial reporting and editing experience. He can be reached at riskletters@lrp.com.
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