A PROPOSED FRAMEWORK FOR ECONOMIC-EVALUATION OF TELEMEDICINE

Economic evaluation of telemedicine compares the costs and other conse quences of delivering specific services through telemedicine vs, alter native means. Cost-effectiveness analysis, the most common method used for health issues, helps to assess whether the expected health benefi ts are worth the investment. Telemedicine raises particular challenges for evaluators: a telemedicine system may have multiple uses and join t costs that are difficult to apportion to one service, the existence of a system may lead to expanded indications for use, and technologica l change may rapidly make an evaluation outdated. Public and private r egulation and payment may affect the diffusion of telemedicine. Uncert ainty surrounds the policy of the U.S. Food and Drug Administration, w hich is still formulating its position. Changes are underway in polici es on licensure and credentialing of clinicians, which have traditiona lly been done by state and by site, to reflect the fact that telemedic ine services may cross these regional boundaries. Lack of insurance co verage for telemedicine services has been considered an impediment to adoption with fee-for-service payment. Under capitation payment and fi xed budgets, however, providers have financial incentives to use the m ost efficient method to deliver services, and these arrangements would favor telemedicine if it is the less costly alternative. If telemedic ine were most costly and the health benefits worth the cost, monitorin g might be needed to ensure the quality of care.