A NSW Health program designed to keep people with chronic diseases out of hospital had the very opposite effect.

Patients who took part in the Chronic Disease Management Program were in fact more likely to be hospitalised, an evaluation of the initiative found.

But the researchers suggested the backfire may have had unintended, potentially life-saving, benefits.

Patients recruited to the program were 70 per cent more likely to have an avoidable hospital admission than chronic disease patients who were left to their own devices, the 15-month study published in PLOS Medicine found.

The program, launched in 2010, aimed to allow patients with conditions including diabetes, cardiovascular and chronic obstructive pulmonary disease to control their conditions in the community by co-ordinating their care. The program also provided health coaching that addressed risk factors, medication and self-management.

"The idea was to try and help people manage their disease outside of hospital and reduce the cost associated with hospital care," said lead researcher Associate Professor Laurent Billot at the George Institute of Global Health.

"It didn't work," he said.

But far from causing the patients harm, the program successfully put the patients in contact with health professionals who spotted problems that needed to be treated in hospitalisation, which may otherwise have been missed.

"In a sense it's both a bad and a good thing," Associate Professor Billot said.

"We didn't prevent future hospitalisations and couldn't lower the cost of hospitalisation - which was the goal - but at the same time people enrolled in the program got the extra care they needed," he said.

The study recruited roughly 30,000 chronic disease patients and matched them to roughly 30,000 controls. All the patients in the study had already been hospitalised or had presented to an emergency department as a result of their condition in the previous year.

The results suggested people with chronic disease needed to be recruited to community-based management programs before their conditions deteriorated to the point that they needed to be hospitalised.

"We're probably enrolling patients too late," Professor Billot said.

A spokesperson for NSW Health said the department was using the evaluation findings as part of an ongoing approach to finding better models of integrated care.

"Going forward, a redesigned approach to chronic disease management has been developed and is being implemented called 'Integrated Care for People with Chronic Conditions'," the spokesperson said.

The revamped program aimed to identify people with chronic disease earlier to help them manage their conditions in the community and potentially avoid an admission.

"The model reinforces the need for collaborative relationships with Public Health Networks and GPs, as well as demonstrating how technology development is vital to support information sharing, data collection, shared care planning and ongoing program quality improvement," the spokesperson said.

From 2014 the NSW Government has committed $180 million over six years to the NSW Integrated Care Strategy.