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Public Procurement and State aid Public Procurement and State aid - - PowerPoint PPT Presentation

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Public Procurement and State aid Public Procurement and State aid rules in Healthcare rules in Healthcare Vassilis G. Hatzopoulos Ass. Professor at the Democritus University of Thrace (Greece) Vis. Professor at the College of Europe, Bruges

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Public Procurement and State aid Public Procurement and State aid rules in Healthcare rules in Healthcare

Vassilis G. Hatzopoulos

  • Ass. Professor at the Democritus University of Thrace (Greece)
  • Vis. Professor at the College of Europe, Bruges (Belgium)

Special Lecturer at the University of Nottingham (UK) Attorney-at-Law, Member of the Athens Bar

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EU Grip: State aid and Public Procurement

EU grip Impact Altmark Procurement Defining PSO

Applicable rules

  • ECJ case law on patients mobility: healthcare is a

“service” subject to all the Treaty rules

  • Art 87 EC on State aids

– direct money transfers to undertakings only upon approval

by the Commission/ system of prior notification

  • PP rules (Dirs 2004/17 and 2004/18) and principles

(Telaustria 2000 etc + Commission Communications):

– contracts should be awarded to undertakings according to

  • pen, competitive tenders

– Principles: transparency, non discrimination, equal

treatment and mutual recognition

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EU Grip: State aid and Public Procurement

EU grip Impact Altmark Procurement Defining PSO

Rules alternative NOT cumulative

Moneys given out according to PP rules /principles

cannot qualify as State aid, as they

– Are the consideration for a specific good/service – Are set according to market forces (competition)

Any given entity should be subject to only one set

  • f rules

– EITHER it is managing public money and has to give it

  • ut according to the PP principles

– OR it is a private undertaking and is free to chose whom

it will get into contractual relations with, but may not receive public funds

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EU Grip: State aid and Public Procurement

EU grip Impact Altmark Procurement Defining PSO

State

Market Public body (or controlled) Private Body State Aid unless PP Aid? Aid? State Aid unless PP

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Impact of the rules on Healthcare

EU grip Impact Altmark Procurement Defining PSO

State

(ministry/local authority/fund) Patients Public Hospitals Practitioners Private Hospitals tax

National Health (Beveridge) System

Procurement State Aid

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Impact of the rules on Healthcare

EU grip Impact Altmark Procurement Defining PSO

State (supervision)

Patients Public Hospitals Practitioners Private Hospitals contributions

Insurance Health (Bismark) System

Public Funds Private Funds

Procurement State Aid

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State aid: The Altmark solution

EU grip Impact Altmark Procurement Defining PSO

Altmark judgment (C-280/00 [2003] ECR I-7747)

State aid rules do not apply (even if no PP award) if PSO

– a) undertaking formally entrusted with PSO (through

contract, concession, exclusive rights etc)

– b) subsidy determined in advance according to

  • bjective and transparent criteria (not end of the year

top-ups)

– c) no overcompensation (reasonable profit is OK) – d) no compensation for inefficiencies

Dec 2005/842: block exemption for hospitals 2005 Framework PSO: all other undertakings

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State aid: The Altmark Solution

EU grip Impact Altmark Procurement Defining PSO

Altmark package Any entity receiving public money should ask:

Is it an undertaking? No If a CE Yes Is it an aid? Altmark JG? Yes No Is it exempt/ Altmark DC? Yes No Bring it under the Altmark FR For ind. exempt Note: JG = judgment DC = decision FR = framework

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Public Procurement

EU grip Impact Altmark Procurement Defining PSO

What PP rules/principles for Healthcare?

  • Contracting entities: Annex III of Dir 2004/18 contains a

list per MS, BUT list not exhaustive; Criteria:

– External: Financing - accomplishment of some PSO – Internal: board of directors, execution of the budget,

contractual freedom, commercial side activities etc

  • Applicable rules

– Health services under the Dir: pre/post contractual

publicity + general procurement principles

– Other services under the Dir: fully fledged application

  • f rules

What is a health service?

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Defining PSO in Healthcare

EU grip Impact Altmark Procurement Defining PSO

Define the scope of PSO in Healthcare

  • Variables

–

Population covered

–

Treatments covered

–

Quality of medical services (qualifications, waiting lists etc)

–

Quality of non-medical services (accommodation, catering)

Are MS free to tailor the scope of SGI in healthcare? YES BUT

– Direct ECJ control for “manifest error”: if too much SGI – Indirect control: Smits & Peerbooms, Watts etc: if too little SGI

What degree of detail is needed/how do you do it?

– general definition, indicators, benchmarks – Legislative act, flexible norms, self-regulation

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Defining PSO in Healthcare

EU grip Impact Altmark Procurement Defining PSO

Calculate the cost of PSO in Healthcare

  • Distinction between capital – exploitation costs

–

Different levels of public participation falsify downstream “markets”

–

Increasing private participation in infrastructure costs – choice should operate according to the PP principles

  • Calculation of the cost of PSO in Healthcare

–

Diagnose Related Groups (DRGs) or equivalent should be used

–

Practitioners’ fees / their own consideration for using the facilities?

–

Number of intermediaries (funds, local authorities) involved?

  • Monitoring

–

The fulfilment of public service obligations by hospitals

–

Overcompensation and refund

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Conclusions

Current situation is pregnant with legal

uncertainties

– Definition of undertaking/contracting entity – Scope of Altmark package – Definition of the scope of PSO in healthcare

Source of differentiation between MS, at least at

the short term but could lead to de facto streamlining in the long term

A common definition of SGO in healthcare at the

EU level could act backwards and affect the definitions and content of national healthcare systems