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Aims To explore the association of primary care and hospitalisation for people with diabetes. Methods The study comprised 20,433 diabetic participants in the Sax Institute's 45 and Up Study. Data on processes of care at recruitment (15 months) were extracted from the Department of Human Services Medicare database. Processes included continuity of primary care (47.1%), and claims for completion of an annual cycle of care (25.0%), GP management plan/team care arrangement (GPMP/TCA, 41.3%), review of GPMP/TCA (24.0%), and monitoring including HbA1c (62.7%). Hospitalisation (12 months) following recruitment was extracted from administrative data held by NSW Ministry of Health. Adjusted incidence rate ratios (aIRR) with 95% confidence interval were calculated. Results A hospital admission was reported for 33.0% of participants. Continuity of care (aIRR: 0.92 (95%CI: 0.89–0.96)), or claims for an annual cycle of care (aIRR: 0.77 (0.74–0.80)) or HbA1c testing (aIRR: 0.92 (0.89–0.96) were associated with a reduced likelihood of hospitalisation. While claims for preparation of GPMP/TCA were not associated with hospitalisation, a claim for review of GPMP/TCA was associated with a reduced likelihood of hospitalisation (aIRR: 0.92 (95%CI: 0.89 0.96)). Conclusions This study has implications for hospital avoidance programmes suggesting that strengthening primary care may be more important than care coordination for this group of patients. [ABSTRACT FROM AUTHOR]