Health system works to adopt Ore. health overhaul

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PORTLAND, Ore. (AP) -- Oregon's health care industry faces the challenge of setting up a new Medicaid system now that federal officials have all but committed to giving the state nearly $2 billion for the initiative.

Officials said Friday they're pressing ahead with the work.

Gov. John Kitzhaber has convinced the Obama administration that he can deliver better health care at a lower cost by investing in preventive care that reduces avoidable hospitalizations. It's a model that's shown some success in pilot projects. But nobody's ever tried to do it for 600,000 patients on Medicaid.

The first $620 million is scheduled to arrive July 1, but the federal Centers for Medicare and Medicaid Services first must formally approve Oregon's application for a waiver from standard Medicaid requirements.