
                         THE MECHANISM OF MEDICINE

                               By BILL WALKER
                                Southam News

     OTTAWA - The machinery that keeps Canada's health-care system
     afloat has taken years to develop into its present form.

     From its earliest beginnings in Saskatchewan, to the most recent
     provisions in the federal budget, Canada's medical system has
     evolved into a complicated $60-billion industry.

     The Constitution leaves responsibility for health care with the
     provinces and territories, resulting in a system of 12 interlocking
     health insurance plans.

     Most of the money for the system comes from provincial coffers.

     But the federal government provides cash transfer payments and tax
     transfers to each province - based on provincial populations and
     the average increase in Canada's Gross National Product.

     In 1989-1990, the federal government kicked in about 37 per cent of
     the $39 billion spent by provincial health insurance plans.

     This money comes with some strings attached.

     The federal government requires health care to be publicly
     administered, accessible, and universal.

     The health insurance plans cover most basic hospital and physician
     services.

     Specialized services such as non-hospital-related physiotherapy,
     sessions with chiropractors, dentists and psychologists, and
     payments for prescription drugs aren't covered - or are only
     partially covered - under the plans.

     Private health plans often include these services.

     The federal 1991 budget included safeguards to ensure provinces
     don't disregard these rules, said Bruce Davis, a director of
     program administration at Health and Welfare Canada.

     The budget implemented a system to withhold money from other
     provincial transfers if provinces don't follow the spirit of the
     Canada Health Act - especially regarding extra billing and user
     charges.

     Both are subject to dollar-for-dollar deductions from the federal
     contributions to a guilty province's health care insurance plan.

     The provinces have sole responsibility for how they spend the
     federal money and how they raise their own share.

     Provincial health ministries negotiate annual budgets with medical
     associations and hospitals.

     Hospital budgets are based on provincial staff-patient and bed-
     patient ratios. And they also take into account the individual
     hospital's efficiency and yearly changes in volume and services.

     The provincial medical associations divvy the money out to family
     doctors and specialists. The doctors are predominantly paid on a
     fee-for-service basis.

