NEW YORK, NY March 04, 2008 —REPORTER: It would be the first time the state does “selective contracting” - driving all Medicaid expenditures for specific procedures to a handful of select institutions that bid for contracts.

State health officials say it would lower cost and improve quality, because the selected hospitals would perform more surgeries and become more proficient.

Alan Aviles, the president of the city’s public hospital system, says there are upsides to limiting how many places can perform some operations.

But, Aviles says he’s concerned about whether patients will be able to access care.

AVILES: The danger here is that selective contracting becomes a way to restrict access – and therefore fewer procedures are being done, despite the need for those procedures.

REPORTER: Three of the city's public hospitals perform about 300 bariatric procedures per year.

State health officials also want to limit the number of hospitals that receive Medicaid reimbursement for breast cancer surgery – with the goal of having fewer institutions perform more procedures, to improve quality and reduce cost.