Feds to put up $1.9B for Oregon health overhaul

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PORTLAND, Ore. (AP) -- The Obama administration is buying into an ambitious health care initiative in Oregon, to the tune of $1.9 billion over five years.

The U.S. Department of Health and Human Services said Thursday it has tentatively agreed to help Oregon pay the startup costs of a plan that would improve coordination among care providers and better manage chronic conditions for 600,000 patients in the state's Medicaid program.

The move shows that the federal government believes the concept has potential to save money. State officials estimate the plan will save $11 billion over the next decade through a reduction in duplicated treatments and unnecessary hospitalizations.

Democratic Gov. John Kitzhaber hopes to prove that states can save billions of dollars on Medicaid without sacrificing the quality of health care.