The money, part of the government's Early Intervention in Chronic Disease Initiative, will help Hepburn Shire residents "live healthier lifestyles and stay out of hospital".

Announcing the grant last week at Daylesford Hospital, health minister Daniel Andrews said the money would provide planned, managed, proactive care, with the client being an active partner in their own care.

The $100,000 would provide an additional 1194 hours of service a year for people with chronic diseases such as heart disease, diabetes and asthma.

The Central Highlands Primary Care Partnership, an alliance of a range of service providers, will receive an additional $20,000 per year to build on work already under way in chronic-disease management.

Chronic diseases such as diabetes, heart disease, stroke, cancer, asthma and osteoarthritis contribute to more than 70 per cent of the overall disease burden due to death, disability and diminished quality of life in Australia. This figure is expected to increase to 80 per cent by 2020.

Mr Andrews said Hepburn Shire residents had a relatively high incidence of conditions such as diabetes, heart disease, chronic obstructive pulmonary disease and asthma.

These were all conditions for which hospitalisation could be avoided, particularly when people and the health agencies work together on preventative actions and early intervention, he said.

Hepburn Health Services chairman John Turnbull told minister Andrews that Hepburn and Daylesford had a "lot of veneer" but there were many people who needed care.

"We will spend this money wisely and make a difference," he said.