Public / Private: A Perfect Match? Part II
By Alexandra Loli, Publisher | Business Partners, May-Jun 2021

Over the past year, our National Health System faced possibly the biggest challenge since its inauguration in 1983. Yet despite the challenges, the response from our National Health System was exemplary. Within months, thousands of doctors and nurses were recruited whilst new biomedical equipment was delivered to every hospital in Greece. The number of ICU beds was doubled and the country has managed to reach the EU average. Central procurement mechanisms were put in place to ensure that adequate quantities of PPE would be available to our healthcare professionals. No one was left unprotected.

the key to a sustainable future is collaboration

One of the most important lessons learned during the ongoing pandemic is the crucial role of collaboration and teamwork that involves both private and public sector organizations. It highlighted the need to strengthen the ties between every key stakeholder, in a race against the most lethal threat of recent history. Collaboration needs to take place at a local, European and global level, through economic funding, contribution of resources, dissemination of knowledge, exchange of best practices, and so on.

It is now clearer than even before that to move things forward to a more sustainable future, the public and private sectors need to move hand-in-hand with transparency, alignment and innovation through technology. The Greek Government has concrete plans to address inefficiencies in the Health Sector by engaging with the private sector in partnerships that can deliver better and more affordable services to our patients.

Working together with the industry, we can rapidly move towards a value-based healthcare system, shifting the focus from volume and price to innovation and value, having a holistic assessment approach at its core, enabling benefits for all partners. This approach aligns with the EU Directive on public procurement, which encourages EU authorities to take a more holistic view on value, contributing to a more innovative, sustainable, inclusive, and competitive economy. Based on the EU Directive, in 2019, approximately 700 tender processes, or 2% of all medtech tenders, were held in Europe, featuring a collaborative element between suppliers and procurers.

Public-private partnership tools would be considered as a financing mechanism to develop new services, new buildings, and new infrastructure for a new healthcare map that will meet the needs of the population. Greece has started to reap the benefits from similar public infrastructure projects and school buildings opening up opportunities for new projects in the healthcare sector, some of which have matured enough to be announced within 2021.

Following the Prime Minister’s commitment, Greece is to become a hub for clinical trials, and along with a new legislative framework, we aspire to develop a research environment where both patients and the pharmaceutical industry can benefit from the investments. One of the tools to incentivize companies to invest is also the mechanism of offsetting clawback with R&D expenses, which is running its second year and is expected to continue in the next three years through the Recovery and Resilience Facility.

To sum up, the key to a sustainable future is collaboration. The Greek Government is committed to working closely with all the stakeholders to develop a sustainable healthcare system available for everyone.

Despite the physical distances created, the Covid-19 pandemic has brought the global healthcare community closer than ever before in an effort to address unprecedented healthcare needs. What the pandemic has vividly demonstrated is that health spending should be a top priority since a reversal of the traditional paradigm holds true, and in fact “wealth is health.” Still, managing the costs of healthcare is very challenging, and the quest for prioritizing investment in healthcare in Greece has never been greater.

In response to the growing demands and limited budgets, public-private partnerships (PPPs) can create improved operational efficiencies and better financial outcomes. This can be achieved through various models of collaboration between private and public stakeholders, such as technology partnerships or managed equipment services (MES) schemes. An MES is a long-term business and financial model between a technology or service provider and a healthcare provider, that has increasingly been proven to make a positive contribution to the sustainability of healthcare systems. In this partnership, the former guarantees sustainable access to the latest medical technology innovations, advanced service delivery, project management support, advanced staff training and financing solutions, and the latter can acquire, maintain, and manage the lifecycle of medical equipment, thereby minimizing the ongoing challenge of equipment obsolescence and ensuring high-quality, effective, and safe patient care.

collaborative partnerships would mark the transition to a value-based partnership

How would the Greek state and its citizens benefit from such collaborations? The initial benefits are obviously financial: the alleviation of capital constraints associated with the acquisition of equipment and the stabilization of operational and cash flow structures. Scheduled technology replacements and updates, provided as part of the MES, also eliminate overspending on current technologies. Equally important is the access the healthcare system gains to state-of-the-art and breakthrough medical technology in the near term—access that might otherwise be deferred due to its high cost. In addition to innovating care delivery, such technology can also attract and retain top clinical providers eager to have access to cutting edge medical equipment in order to provide high-quality care. Over and above these, the greatest benefit is to the patient, who receives the best care possible in both terms of diagnosis and treatment, along with an improved patient experience.

The Greek healthcare system would clearly benefit from such partnerships by enabling a digital transformation in hospitals that facilitates clinical care pathway integration and data-led operations. The MES can also provide additional value focused on digital solutions, artificial intelligence and advisory services, leading to increased efficiencies and improved clinical, operational, and financial outcomes. After all, metrics related to finance, productivity, and quality are most commonly used to benchmark and assess the impact of an MES.

MES is only one of the multiple models that public and private stakeholders can implement to bridge technology gaps, accelerate outcomes, increase productivity and enable better health access for all. Beyond all benefits, the implementation of collaborative partnerships would mark the transition to a value-based partnership, which would render our healthcare system ready to face not just another pandemic, but transform future challenges and sustainability threats into opportunities for next-generation healthcare delivery.

Taxation poses a major role in terms of attracting foreign investors and cultivating a friendly business environment. However, from the view of the General Secretariat of Private Investments and PPPs (public-private partnerships) when it comes to aiding economic recovery and enhancing development the tools at our disposal are numerous (including the grant of tax benefits).

Regarding the framework governing the public-private partnerships, where both the public and private sector cooperate in order to create projects of major significance in terms of public interest, we now hold a very useful tool, the new PPP preparation facility, aiming to enhance and accelerate the implementation of PPPs in Greece. For that, we joined forces with the European Bank for Reconstruction and Development, which shall act as our partner in the maturing process for the projects to be included in our pipeline (currently this includes projects in the social infrastructure sector, sustainable urban infrastructure, and waste management). In addition, we aim for the Recovery Fund to facilitate a new reform culture, of which we expect PPPs to form an important part, by enhancing and consolidating a new culture of cooperation between the public and private sectors.

the tools at our disposal are numerous

As far as private investments are concerned, we are working towards the creation of a friendlier business environment, focusing on the acceleration of the procedures, simplification of the legal framework, and most importantly on strengthening the incentives granted. The main focus has been to proceed as quickly as possible to all necessary reforms in order for all investments and projects to be implemented faster and more efficiently than before. We have taken into account the problems and challenges businesses have faced during the crisis, we have carried out numerous consultations with public and private bodies in order to better address those problems, and we have already taken steps towards the goals mentioned above, based on useful input provided by the private sector. We have abandoned the policy of constantly granting extensions for the submission of investment plans for the benefit of faster assessments, we have multiplied the committees that handle the auditing procedures for the benefit of faster completion of audits, we have negotiated with the European Commission the increase of the regional aid percentages in most regions of our country, and we have designed more effective and simple procedures regarding private  investments, that will be introduced shortly, through proposed amendments of L. 4399//2016 and a more attractive regime for direct foreign investments (L. 89/1967).

Finally, as regards the strategic investments regime (L. 4608/2019), where the grant of tax incentives and incentives for hiring employees (under specific requirements set out by law) has recently been implemented, in order to further attract investments of major impact (since the regime applies to investments of a total budget above €20 million), we have included in our forthcoming draft Act additional incentives, further simplification of the fast-track licensing procedure, new strategic investments categories, and numerous other provisions that we believe will further improve the attractiveness of the regime.

There are two major flaws in our tax system today that create strong barriers to nurturing a business-friendly environment. The first refers to the complete lack of trust between the tax authorities and the business community. The business community see the tax audit process as a necessary evil with the sole purpose of raising money for the central treasury, while tax auditors are faced with a moral hazard, meeting financial targets while being unwilling to carry the weight of interpretation(s) of ministerial circulars, court decisions, etc. As a result, taxpayers need to choose their proverbial poison, choosing between settlement and going to court. The second major flaw of our tax system is that in order to dispute a tax assessment, taxpayers need to go through a multi-layered and complex process that can last anywhere from five to 10 years. The existing out-of-court petition procedure is clearly ineffective, and as a result, there are currently more than 80,000 tax disputes waiting to be assessed by a judge.

Things are moving at a high pace and we ought to keep up

It is critical that the state utilizes the private sector’s resources and expertise to find solutions and push things forward. Recently we’ve seen the government partnering with the private sector to create an attractive business environment. For example, the initiative by the Ministry of Development (and EBRD) to establish a public-private partnership (PPP) preparation facility cooperation account. In a nutshell, the General Secretariat of Private Investments will partner with the private sector focusing on maturing and accelerating the implementation of PPP projects.

In the area of taxation, the most successful example of the state and private sector working together to nurture a business-friendly environment was the introduction of the Tax Audit Certificate (Art. 65A L.4174/2013). Another, more recent example, is the Auditor’s Certificate to expedite the approval process for businesses that invest in R&D and who are entitled to the tax super-deduction based on the provisions of Art. 22A L.4172/2013.

Can the state leverage off the private sector’s expertise and resources to address certain flaws of our tax system?

The Independent Authority for Public Revenue (IAPR), similarly to the PPPs initiative by the MoD, can introduce framework agreements with independent advisors that will take on to review open tax cases (old and new) and form an opinion. The outcome of this arbitration-like process should be a recommendation to IAPR on whether to pursue cases at court, offer settlement instead or drop the case on the basis of insufficient technical grounds. The recommendation by the independent advisor won’t be binding for IAPR but will be very informative about whether the state should spend money and resources pursuing certain cases or not. Where the taxpayer has exhausted options for an out-of-court settlement, then a fast-track legal process should be introduced that will lead to a binding decision within 18 months. Things are moving at a high pace, and we ought to keep up.

Currently, many countries are introducing policies to revive their economies following the pandemic. It is time for bold decisions in the pursuit of foreign investments. Lowering headline tax rates without efficient procedures for taxpayers to dispute assessments will be another wasted opportunity. At the end of the day, it is all about trust.

The year 2020 overturned all predictions as regards the global economy and social behavior in an unexpected way. Millions of people all over the world were asked to radically adapt their consumer needs according to new services offered by the market. As realities changed due to governments’ Covid-19 response, e-commerce quickly became consumers’ first choice. E-shops proved indeed crucial in securing profits and minimizing losses for firms during the pandemic.

However, the pandemic put significant pressure on businesses, especially SMEs, to invest in digital platforms. Despite the way it all happened, what matters most is that at the end of this tremendous health crisis, there will be a parallel developed market acting complementary with traditional commerce; and also enhancing competitiveness between the latter and e-commerce.

This new framework ensures that a fair and competitive digital economy will allow firms to enjoy new opportunities for growth

In this new business environment, the government implemented bold reforms as regards the digital transformation of public services, hence eliminating bureaucracy and also operational costs for the state. These reforms ensured that business activities are efficiently monitored and that firms operate smoothly.

It’s true that even hybrid firms of commercial activity, such as click-away and click-n-shop, were seen by both firms and consumers as a resort so as to manage a brand new normal. In front of us, there is indeed a new commercial environment being constantly transformed by digital technologies, creating new models of business development that impact the economy at large. Digital transformation of firms is a prerequisite for the very survival of modern economies. That’s why EU member states are preparing a new institutional framework so as for this transformation to prove equally beneficial for both firms and citizens, who will be able, from now on, to operate within a safe and credible digital environment.

This new framework, based on acts dealing with digital services and markets, ensures that a fair and competitive digital economy will allow firms to enjoy new opportunities for growth.

This new framework, in the development of which the Ministry of Development and Investments is particularly involved, defines new norms promoting innovation and competitiveness and facilitates growth for smaller business platforms and startups. It also advances consumer protection, securing their rights when shopping online.

Last but not least, Prime Minister Mitsotakis and his government have put priority on making Greek businesses not only sustainable but also profitable. Hence, the Greek Recovery and Resilience Plan (RRP), Greece 2.0 will devote €375 million to digitally transform SMEs and boost their development and competitiveness in the post-pandemic era.

For over a year now, our country has been suffering the devastating repercussions of an unprecedented predicament. The effects of the pandemic have spread throughout almost every sector of the economy. Health institutions and social cohesion came under unprecedented pressure. The repercussions transformed the daily lives of each one of us—whether for better or for worse is yet to be determined. But one thing is certain: The implications will spread over time and will have a cumulative influence on all aspects of the national economy. The pandemic will linger for an undefined period, and economies, markets and businesses will continue to improvise and adapt.

Visionary goals make people happy and inspire them

Different businesses in various countries met diverse challenges and reacted with varied practices. The paradigm of Greek market sectors is a case of its own. The country had emerged from a prolonged financial trauma and had just started walking the long road to recovery when the outbreak of Covid-19 occurred. Companies were gaining momentum and consumer trust was on the rise. The “feeling better” sentiment reigned throughout; but all this came to a halt before reverting dramatically for specific sectors. F&B suffered a devastating blow. The one thing, however, that surprised everyone was the overall systemic resilience of the economy. Companies reacted swiftly and responded effectively to the challenge of implementing health protocols. The health of customers, employees and partners became a number one priority. At the same time, a shift into digital alternatives and remote work enabled operational continuity for a respectable percentage of businesses.

It goes without saying that the lockdowns, especially the extended second one, had a multifaceted adverse effect on retail. Digital infrastructures and transformation as a functional solution led to a considerable increase in e-commerce. Yet during the first lockdown, the total number of e-shoppers hardly changed. There was a considerable positive shift among millennials (Generation Y, 25-40 years old). Indeed, the very same population hold a positive stance towards remote working (51%). All in all, Gen Z and Gen Y (18-24 years old) show an ever-increasing adaptation to the digital world of commerce. Loss of physical touchpoints appeared to have an average to low impact relevance with everyday life. On the other hand, at times of extraordinary circumstances, the public will rarely enter uncharted behavioral lands, unhesitatingly embrace the new, or boldly overcome cultural divides. Hence, it became apparent that customers (and business systems) were more than eager to revert to “good” old-fashioned practices. We can hardly accept the validity of horizontal attitude change. The traditional buying experience is still the name of the retail game.

Eventually, a new hybrid environment will prevail in the retail sector. It is unclear to what extent it will trigger a mindset change. Come September, Greece will enter a phase of development powered by the EU Recovery and Resilience Fund. There are layers of challenges ahead and public-private partnerships could help expedite sustainable practices. Sustainable business, climate neutrality and human rights have more chances to find their way into the corporate value matrix. Visionary goals make people happy and inspire them. Internal and external stakeholders will grab the opportunity to transcend formal attitudes and make a difference in their life. Eventually, this broad behavioral matrix will find its way into the so much expected return to “normalcy.”