In the medical exam, a general physical exam is conducted checking any mobility issues, eyesight, general psychological state, and general condition of internal organs.
As regards the blood work, tests are conducted for HIV, Syphilis, glucose. Urinie analysis is also done with a dipstick. A chest x-ray is done for TB. This is pretty much it.
What CIC is trying to look is for any medical condition that would cause unnecessary burden on medical setup or risk to public health. Medical conditions such as TB are a public health concern and will be a sure shot case for denial. However, if a patient has been treated or is undergoing treatment for TB, CIC could consider the case and allow upon satisfying that the disease has been cured.
When it comes to a burden on medical setup, conditions such as HIV or other similar conditions that require periodic medicines or medical care will be a ground for denial. This is not absolute and there have been cases where people have demonstrated that they will not be a burden on the health services. One of the cases that I remember is where an applicant was HIV positive. His application was denied on medical grounds. He challenged the decision in the court and demonstrated that he has private medical insurance that would cover the cost for medicines. He also had an undertaking from a non profit which assured him medicines in Canada free of cost. Based upon this the CIC's denial was turned down and he was granted PR.
But, such a case is a exception and not a norm. Small medical conditions such as hypertension, thyroid etc are not ground for inadmissibility. Challenging a denial on medical grounds is a tough battle and needs specialized lawyers and money. Its is subjective and arbitrary where there are no clear rules.
