Pressures for the adoption of telemedicine place increased demands on purch
asers to assess applications of the technique. Assessment principles are he
lpful in defining an evaluation framework for use at the local level. We su
ggest an assessment approach that includes five specific elements: specific
ation; performance measures; outcomes; summary measures; and operational an
d other considerations. The approach described here was developed to assist
with the needs of individual health authorities and institutions within th
e health-care system of Alberta. Aspects of the approach are illustrated us
ing a telepsychiatry example under the assumptions made. Conventional psych
iatry (where the patient visited the psychiatrist) was most expensive for t
he patient. The alternatives, telepsychiatry and outreach psychiatry (where
the psychiatrist travelled to the patient), cost about the same from the s
ervice provider's perspective (and from that of society as a whole); they w
ere both much cheaper for the patient. At higher volumes, telepsychiatry wo
uld be cheaper than outreach.