Governor Spitzer’s plan to use state funds to pay for health insurance for uninsured children and to focus on preventive care for all New Yorkers is garnering praise from the health care industry, a change from last year, when hospitals and health-care employee unions furiously fought the governor’s efforts to rein in Medicaid spending.

In his state of the state address yesterday, Mr. Spitzer proposed a new physician “peace corps” that would offer grants to repay student loans for doctors who work in medically underserved communities. Mr. Spitzer also described a shift in Medicaid reimbursement rates to encourage preventive and primary care rather than expensive hospital stays. “When the state is buying, we need to pay for the right care at the right price in the right medical setting,” Mr. Spitzer said.

While initial response from the industry was positive, a confrontation may yet be possible, as budget details emerge. Yesterday, administration officials declined to specify the cost of certain proposals. “That will come out with the budget,” the state Health Commissioner, Dr. Richard Daines, told The New York Sun.

“We’re a little bit concerned about what the budget itself will present in terms of any potential reduction in funding,” a spokesman for the Healthcare Association of New York State, William Van Slyke, said. “We are supportive of providing greater reimbursement for doctors … but you can’t take it out of the hospitals to do so.”

The president of the Greater New York Hospital Association, Kenneth Raske, a critic of last year’s spending agenda, praised the themes presented yesterday by Mr. Spitzer as “excellent.”

He stressed that the hospital industry hoped to work with legislators to craft a fair budget. “I think everybody wants to take this in a very civil and thoughtful fashion,” he said.

The executive director of the Primary Care Development Corporation, Ronda Kotelchuck, issued a statement praising the governor. “Governor Spitzer today took a giant step toward strengthening our primary and preventive care system,” she said.

Physician groups also cheered proposals to address physician shortages and to increase reimbursement rates for primary and preventive care, a longtime grievance among doctors. “Where there are physician shortages there are access problems,” the vice president for governmental affairs for the Medical Society of the State of New York, Gerard Conway, said.

In his address, Mr. Spitzer also said the administration was committed to stem cell research.