Hospital Insurance and Diagnostic Services Act

Widely acknowledged as the foundation for future developments in the Canadian health care system, the HIDS Act was a landmark example of federal-provincial cooperation in post-war Canada.

[4] Prior to World War II, health care in Canada was privately funded and delivered, with the exception of services provided to the sick poor that were financed by local governments.

Though the provinces provided relief payments for food, clothing, and shelter, additional medical costs were beyond the capacity of most of the provincial budgets.

In a bid for unprecedented cooperation between the federal and provincial governments, these initiatives formed the foundations of a national program for social security, including provisions for health insurance.

However, the failure to come to a consensus on the required allocation of tax resources at the Dominion-Provincial Conference in August 1945 precluded adoption and delayed subsequent action.

However, a solution to the problem of providing medical and hospital services to a population reeling from the devastating effects of the depression required a greater provincial contribution.

Five provinces, namely British Columbia, Alberta, Saskatchewan, Ontario, and Newfoundland, accepted the proposal, laying the groundwork for a Canadian health insurance plan.

[4] Under the Act, the federal government agreed to fund approximately 50% of the costs of provincial or territorial insurance plans for hospital and diagnostic services.

Provincial and territorial insurance plans were to cover acute, convalescent, and chronic care of patients, including diagnostic services and in-patient drug administration in hospital facilities.

Hospital employees including physicians, laboratory technicians, and radiologists were to be paid via a fee-for-service model negotiated with the provincial or territorial administrative body.

Then, on July 1, 1967, the governing Liberals under Lester B. Pearson introduced the Medical Care Act, covering 50% of physician costs outside of a hospital.