PORTLAND, Ore. (AP) — The Obama administration is buying into anambitious health care initiative in Oregon, announcingThursday it has tentatively agreed to chip in $1.9 billion overfive years to help get the program off the ground.

Oregon hopes to prove that states can save billions on Medicaidwithout sacrificing the quality of health care. Gov. JohnKitzhaber's plan would invest in preventive care to keep patientshealthy so they don't need expensive hospitalizations.

"If this works, I think other states are going to be looking atthis as a way to manage that patient population," said Kitzhaber, aDemocrat and former emergency room physician who has worked fordecades on reforming the health care system.

The federal government could save $1.5 trillion over the next 10years if all 50 states adopted Oregon's approach, the governor hassaid.

Medicaid, which provides health coverage for low-incomeAmericans, is jointly funded by the state and federal governments.Federal officials have not yet agreed to grant Oregon a waiver fromstandard Medicaid regulations, which is needed for the program tobe implemented and the money to be spent.

The financial commitment from the U.S. Department of Health andHuman Services, while tentative, is a clear public endorsement ofthe concept and an indication that the administration believes theinitiative holds promise to save money. The state anticipatessavings of $11 billion to state and federal budgets over the nextdecade by reducing duplicated treatments and avoidablehospitalizations.

Finding ways to deliver health care for cheaper is acritical challenge as baby boomers age and President Barack Obama'shealth care overhaul extends coverage to millions moreAmericans, many of whom will join Medicaid in 2014. Under Obama'sAffordable Care Act, the federal government will pay most of thecosts for the new patients.

In a statement, Health and Human Services Secretary KathleenSebelius said Oregon's plan "mirrors our plan at the national levelunder the Affordable Care Act."

"This is another example of how we are collaboratingsuccessfully with states in their efforts to find innovativehealth care solutions that work for their communities,"Sebelius said.

The Oregon plan would create "coordinated care organizations" tomanage all mental, physical and dental care for 600,000 low-incomepatients on the Oregon Health Plan, the state's Medicaid program.It would focus particularly on the sickest patients with thehighest costs, especially people with chronic conditions such asdiabetes and asthma or with mental health concerns.

The point, proponents say, is to provide money for services thatkeep people healthy but don't get much funding — such as payingcaseworkers to make sure patients go to medical appointments andtake their medications. The state Legislature overwhelminglyendorsed the idea this year and last, though some Republicanscomplained that it would increase the government's role inhealth care.

Kitzhaber cleared his schedule at the last minute this week tofly to Washington, D.C., and finalize the deal for the money.

The federal money will lessen the impact of payment cuts toproviders and help them pay the upfront costs of the new initiativebefore the savings can kick in. Oregon, facing a budget shortfall,planned to severely cut payments to doctors, hospitals and othercare providers beginning this summer.

Potential coordinated care organizations, which had been workingto comply with proposed requirements, were eager to find out howmuch federal money would be available. Many will have to upgradetheir computer systems so patient records can be shared, or hirenew staff to manage patient care. They face a May 14 deadline tosubmit financial proposals to the state.

The changes will initially apply only to Medicaid patients, butKitzhaber wants to eventually extend it to government workers andthe general public.