OTTAWA - The federal government will officially begin discussions on the next health- care accord this week — talks that will define the fiscal and social-policy relationship between Ottawa and the provinces for years to come.

Health Minister Leona Aglukkaq is to meet her provincial counterparts in Halifax on Friday for their first formal talks on how to reform and pay for health care after the current agreement expires in 2014.

"This will be an opportunity to talk about what's working and begin to talk about what principles will guide upcoming decisions about health care," said Steve Outhouse, a spokesman for Aglukkaq.

Billions of dollars and the quality of hospitals, medical treatment and prevention measures are at stake, as is the very nature of Prime Minister Stephen Harper's relationship with the provinces.

The federal government is providing $27 billion to the provinces for health care this fiscal year, an amount that is set to rise by six per cent a year for the next four years even as Ottawa struggles to balance its books.

But the provinces provide the bulk of the funding — often at the expense of other programs and their general fiscal health.

They are desperate to find ways to wrestle down costs and that process is well underway in many provinces. Ontario, for example, has pledged to hold health-care increases to just one per cent a year. And other provinces are poised to cut outright.

"How do we, facing the challenges that we face now as a country, ensure that we don't break the bank, but that we continue to have a system which ensures healthier Canadians?" asked health-law expert Maureen McTeer, who leads a Canadian Nurses Association task force.

McTeer says the federal and provincial ministers need to find a way to preserve an acceptable acute-care system based in hospitals and complement it with much better and more efficient primary care based in communities.

But the formal beginning of the health-care talks this week is a soft launch.

The ministers are only devoting an hour to the topic during their meetings.

"There are still more than two years until the health accord expires and it's important to point out that work is underway on a number of topics that affect the health of Canadians," said Outhouse. "These initial discussions will be one of several agenda items this Friday."

The health ministers don't plan to tackle the thorny issue of who will pay for the mounting costs. That will be left to finance ministers.

Critics fear the fiscal squeeze will mean cuts to health care or privatization and they plan to make their concerns known loudly from the margins of the meetings.

But the tough decisions are still a ways off. The recent round of provincial elections means most of the provincial health ministers are new to their jobs, and not yet ready to plunge into serious negotiations.

And Ottawa has taken off some of the heat by promising to continue six-per-cent annual increases in funding for two years beyond the expiry of the current accord in 2014.

Plus, the federal government has made it clear it does not want to conduct the kind of crisis-fuelled negotiation that former prime minister Paul Martin conducted earlier this decade. Conservative insiders say that kind of atmosphere led to long-lasting, but poor decisions, with little accountability.

While ministers have only just begun formally setting out their bargaining positions, officials at both levels of government have been preparing the groundwork for almost a year.

At the same time, a range of professional groups and researchers have conducted their own cross-country hearings and investigations into the state of health care.

There seems to be a consensus that the long-time focus on acute care in hospitals is insufficient, said McTeer. But there is also a realization that to expand publicly funded health care beyond its current realm would require finding significant reforms and savings elsewhere.

But where those efficiencies can be found and whether or not governments can afford them as the population ages are open questions. At the same time, calls for more home care, better palliative care and a national pharmacare program are growing constantly louder.

McTeer's task force and others call for a national, consensus-building conference next year to give governments a solid basis to build upon.

At this point, the policy makers and the experts are talking past each other, noted economist Don Drummond said in a recent report.

"Many analysts and health-care stakeholders have been sounding the alarm: Canada's health system is unsustainable. But their alarms are not being heard by the public and government action is slow and incremental," he said.