We conducted a simple comparison of the costs associated with deliveri
ng a mental health service by telepsychiatry and by conventional metho
ds. The telepsychiatry rural outreach service was delivered to a minin
g town 900 km from the regional hospital in Townsville. When the telem
edicine service was well established, 40 cases a month were seen for g
eneral adult psychiatry, four for child and adolescent mental health,
four for psychology and two for forensic services. Costs and quality-o
f-life issues were considered. The savings to the health authority wer
e estimated to be $85,380 in the first year and $112,790 in subsequent
years, not allowing for maintenance and equipment upgrading. We also
estimated a 40% reduction in patient transfers due to the introduction
of telemedicine. Based on the previous year's figures of 27 transfers
at $8920 each, this would produce an annual saving of $96,336 for the
Royal Flying Doctor Service. The results of the study showed consider
able savings from reduced travel by patients and health-care workers.