The term telemedicine encompasses a wide range of telecommunications a
nd information technologies and many clinical applications, although i
nteractive video may be the most common medium. The first telemedicine
programs were established almost 40 years ago, but the technology has
grown considerably in the past decade. Despite the expansion of telem
edicine, the volume of patients receiving services that use the techno
logy remains relatively low (about 21 000 in 1996). In part, this refl
ects the lack of a consistent coverage and payment policy and concerns
about licensure, liability, and other issues. A considerable amount o
f federal funding has supported telemedicine in recent years, and legi
slators and federal, regional, and state policymakers are struggling w
ith several crucial policy matters. Research on the effectiveness of t
elemedicine is somewhat limited, although the work that has been done
thus far supports the hypothesis that, in general, the technology is m
edically effective. The cost-effectiveness of specific telemedicine ap
plications has not yet been rigorously demonstrated.