Thirty-one new Primary Health Networks will replace Labor's 61 Medicare Locals across Australia from July 1, the government says.
Health Minister Sussan Ley said on Saturday the successful applications to run the new PHNs had been selected following a thorough tender process.
She said the 31 new PHNs would cost almost $900 million and generally align with state Local Hospital Networks to ensure better integration between primary and acute care services.
Ms Ley said the government wanted to ensure Australians could access the right care, in the right place, at the right time.
"Primary Health Care networks form a core part of our plan," she said in a statement.
Labor launched Medicare Locals in 2011 to better co-ordinate delivery of healthcare, making it easier for patients to negotiate the maze of services.
A review commissioned by the coalition found a few high performing Medicare Locals but most were not fulfilling their intended role. They were scrapped in last year's budget.
Ms Ley said many of the successful PHNs were consortiums harnessing skills and knowledge from a range of sources, including health providers, universities, private health insurers and some of the more-successful former Medicare Locals.
She said the new PHNs would concentrate on delivery of frontline services not backroom bureaucracy, improving the overall operational efficiency of the network by 30 per cent.
"By aligning PHNs with state Local Hospital Networks we also aim to reduce the merry-go-round for many patients with chronic or complex conditions between primary care and hospital treatment," she said.
Australian Healthcare and Hospitals Association chief executive Alison Verhoeven said a challenging job was ahead to get the new PHNs up and running by July 1.
"Maintaining patient services, for example in mental health, must be a priority as transition plans are implemented and organisations are developed," she said in a statement.
Shadow health minister Catherine King said the government had opened the door for a fundamental attack on Medicare by awarding contracts for four PHNs to consortia involving private health insurers.
She said that gave private health insurers a direct say in primary health care in these areas, opening the way for interference in relationships between doctors and patients and expanding their reach into general practice.
"Allowing private health insurers to run PHNs is the first step towards a two-tiered health system with health insurance members able to jump the queue," she said in a statement.
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