Skip to main content
SpringerLink
Log in

The added value of thorough economic evaluation of telemedicine networks

  • Original Paper
  • Published:
The European Journal of Health Economics Aims and scope Submit manuscript

Abstract

This paper proposes a thorough framework for the economic evaluation of telemedicine networks. A standard cost analysis methodology was used as the initial base, similar to the evaluation method currently being applied to telemedicine, and to which we suggest adding subsequent stages that enhance the scope and sophistication of the analytical methodology. We completed the methodology with a longitudinal and stakeholder analysis, followed by the calculation of a break-even threshold, a calculation of the economic outcome based on net present value (NPV), an estimate of the social gain through external effects, and an assessment of the probability of social benefits. In order to illustrate the advantages, constraints and limitations of the proposed framework, we tested it in a paediatric cardiology tele-expertise network. The results demonstrate that the project threshold was not reached after the 4 years of the study. Also, the calculation of the project’s NPV remained negative. However, the additional analytical steps of the proposed framework allowed us to highlight alternatives that can make this service economically viable. These included: use over an extended period of time, extending the network to other telemedicine specialties, or including it in the services offered by other community hospitals. In sum, the results presented here demonstrate the usefulness of an economic evaluation framework as a way of offering decision makers the tools they need to make comprehensive evaluations of telemedicine networks.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Sisk, J.A., Sanders, J.H.: A proposed framework for economic evaluation of telemedicine. Telemed. J. 4, 31–37 (1998)

    Google Scholar 

  2. Pelletier-Fleury, N., Fargeon, V., Lanoe, J.L., Fardeau, M.: Transaction costs economics as a conceptual framework for the analysis of barriers to the diffusion of telemedicine. Health Policy. 42, 1–14 (1997). doi:10.1016/S0168-8510(97)00038-9

    Article  Google Scholar 

  3. Williams, T., May, C., Mair, F., Mort, M., Gask, L.: Normative models of health technology assessment and the social production of evidence about telehealth care. Health Policy. 64, 39–54 (2003). doi:10.1016/S0168-8510(02)00179-3

    Article  Google Scholar 

  4. Keen, J., Bryan, S., Muris, N., Weatherburn, G., Buxton, M.: Evaluation of diffuse technologies: the case of digital imaging networks. Health Policy. 34, 153–166 (1995). doi:10.1016/0168-8510(95)00767-9

    Article  Google Scholar 

  5. Hailey, D., Ohinmaa, A., Roine, R.: Study quality evidence of benefit in recent assessments of telemedicine. J. Telemed. Telecare. 10, 318–324 (2004). doi:10.1258/1357633042602053

    Article  Google Scholar 

  6. Roine, R., Ohinmaa, A., Hailey, D.: Assessing telemedicine: a systematic review of literature. CMAJ. 65, 765–771 (2001)

    Google Scholar 

  7. Withed, J.D.: The quality of telemedicine research. J. Telemed. Telecare. 12, 271–273 (2006). doi:10.1258/135763306778558114

    Article  Google Scholar 

  8. Whitten, P.S., Mair, F., Haycox, A., May, C.R., Williams, T.L., Hellmich, S.: Systematic review of cost effectiveness studies of telemedicine interventions. Br. Med. J. 324, 1434–7 (2002)

    Google Scholar 

  9. Hakansson, S., Gavelin, C.: What do we really know about the cost-effectiveness of telemedicine? J. Telemed. Telecare. 6(1), 133–136 (2000). doi:10.1258/1357633001934438

    Article  Google Scholar 

  10. Scott, J.: Telehealth outcomes: a synthesis of the literature and recommendations for outcome indicators. J. Telemed. Telecare. 13 (2007)

  11. Pak, H.S., Datta, S.K., Triplett, C.A., Lindquist, J.H., Grambow, S.C., Whited, J.D.: Cost minimization analysis of a store-and-forward teledermatology consult system. Telemed. J. E. Health. 15(2), 160–165 (2009). doi:10.1089/tmj.2008.0083

    Article  Google Scholar 

  12. Morganti, A.G., Pasquarelli, L., Deodato, F., Digesù, C., Di Falco, C., Dinapoli, N., Macchia, G., Picardi, V., Tagliaferri, L., Valentini, V., Cellini, N.: Videoconferencing to enhance the integration between clinical medicine and teaching: a feasibility study. Tumori. 94(6), 822–829 (2008)

    Google Scholar 

  13. Dowie, R., Mistry, H., Young, T.A., Franklin, R.C., Gardiner, H.M.: Cost implications of introducing a telecardiology service to support fetal ultrasound screening. J. Telemed. Telecare. 14(8), 421–426 (2008). doi:10.1258/jtt.2008.080401

    Article  Google Scholar 

  14. Gomez-Ulla, F., Alonso, F., Aibar, B., Gonzalez, F.: A comparative cost analysis of digital fundus imaging and direct fundus examination for assessment of diabetic retinopathy. Telemed J. E. Health. 14(9), 912–918 (2008)

    Article  Google Scholar 

  15. Buysse, H., De Moor, G., Van Maele, G., Baert, E., Thienpont, G., Temmerman, M.: Cost-effectiveness of telemonitoring for high-risk pregnant women. Int. J. Med. Inform. 77(7), 470–476 (2008)

    Article  Google Scholar 

  16. Schaafsma, J., Pantazi, S.V., Moehr, J.R., Anglin, C.R., Grimm, N.A.: An economic evaluation of a telehealth network in British Columbia. J. Telemed. Telecare. 13(5), 251–256 (2007). doi:10.1258/135763307781458877

    Article  Google Scholar 

  17. Norum, J., Bergmo, T.S., Holdø, B., Johansen, M.V., Vold, I.N., Sjaaeng, E.E., Jacobsen, H.: A tele-obstetric broadband service including ultrasound, videoconferencing and cardiotocogram. A high cost and a low volume of patients. J. Telemed. Telecare 13(4), 180–184 (2007). doi:10.1258/135763307780908085

    Article  Google Scholar 

  18. Tsai, S.H., Kraus, J., Wu, H.R., Chen, W.L., Chiang, M.F., Lu, L.H., Chang, C.E., Chiu, W.T.: The effectiveness of video-telemedicine for screening of patients requesting emergency air medical transport (EAMT). J. Trauma 62(2), 504–511 (2007)

    Article  Google Scholar 

  19. Scalvini, S., Tridico, C., Glisenti, F., Giordano, A., Pirini, S., Peduzzi, P., Auxilia, F.: The SUMMA Project: a feasibility study on telemedicine in selected Italian areas. Telemed. J. E. Health. 15(3), 261–269 (2009). doi:10.1089/tmj.2008.0109

    Article  Google Scholar 

  20. Crow, S.J., Mitchell, J.E., Crosby, R.D., Swanson, S.A., Wonderlich, S., Lancanster, K.: The cost effectiveness of cognitive behavioral therapy for bulimia nervosa delivered via telemedicine versus face-to-face. Behav. Res. Ther. 47(6):451–453 (2009)

    Google Scholar 

  21. Moreno-Ramirez, D., Ferrandiz, L., Ruiz-de-Casas, A., Nieto-Garcia, A., Moreno-Alvarez, P., Galdeano, R., Camacho, F.M.: Economic evaluation of a store-and-forward teledermatology system for skin cancer patients. J. Telemed. Telecare 15(1), 40–45 (2009). doi:10.1258/jtt.2008.080901

    Article  Google Scholar 

  22. Smith, B., Hughes-Cromwick, P.F., Forkner, E., Galbreath, A.D.: Cost-effectiveness of telephonic disease management in heart failure. Am. J. Manag. Care. 14(2), 106–115 (2008)

    Google Scholar 

  23. Elliott, R.A., Barber, N., Clifford, S., Horne, R., Hartley, E.: The cost effectiveness of a telephone-based pharmacy advisory service to improve adherence to newly prescribed medicines. Pharm. World. Sci. 30(1), 17–23 (2008)

    Article  Google Scholar 

  24. Bensink, M., Wootton, R., Irving, H., Hallahan, A., Theodoros, D., Russell, T., Scuffham, P., Barnett, A.G.: Investigating the cost-effectiveness of videotelephone based support for newly diagnosed paediatric oncology patients and their families: design of a randomised controlled trial. BMC. Health. Serv. Res. 7, 38 (2007)

    Article  Google Scholar 

  25. Jackson, K.M., Scott, K.E., Graff Zivin, J., Bateman, D.A., Flynn, J.T., Keenan, J.D., Chiang, M.F.: Cost-utility analysis of telemedicine and ophtalmoscopy for retinopathy of prematurity management. Arch. Ophthalmol. 126(4), 493–499 (2008). doi:10.1001/archopht.126.4.493

    Article  Google Scholar 

  26. Bott, O.J., Hoffmann, I., Bergmann, J., Gusew, N., Schnell, O., Gómez, E.J., Hernando, M.E., Kosche, P., von Ahn, C., Mattfeld, D.C., Pretschner, D.P.: HIS modelling and simulation based cost-benefit analysis of a telemedical system for closed-loop diabetes therapy. Int. J. Med. Inform. 76(Suppl 3), S447–S455 (2007)

    Article  Google Scholar 

  27. Bashshur, R.L.: Telemedicine effects: cost quality and access. J. Med. Syst. 19, 81–91 (1995). doi:10.1007/BF02257059

    Article  Google Scholar 

  28. McIntosh, E., Cairns, J.: A framework for the economic evaluation of telemedicine. J. Telemed. Telecare. 3, 132–139 (1997). doi:10.1258/1357633971931039

    Article  Google Scholar 

  29. Lobley, D.: The economics of telemedicine. J. Telemed. Telecare. 1996(3), 117–125 (1996)

    Google Scholar 

  30. Drummond, M.F., O’Brien, B., Stoddart, G.L., Torrance, G.W.: Methods for the economic evaluation of health care programmes. 2nd edn, Oxford University Press, Oxford (1997)

  31. Armstrong, A.W., Dorer, D.J., et al.: Economic evaluation of interactive teledermatology compared with conventional care. Telemed. E. Health. 13(2), 91–99 (2007)

    Article  Google Scholar 

  32. Bergmo, T.S.: A cost minimization analysis of a realtime teledermatology service in northern Norway. J. Telemed. Telecare. 6, 273–277 (2000). doi:10.1258/1357633001935905

    Article  Google Scholar 

  33. Della Mea, V., Cortolezzis, D., Beltrami, C.A.: The economics of telepathology—a case study. J. Telemed. Telecare. 6(Suppl.1), 168–169 (2000)

    Google Scholar 

  34. Doolittle, G.C.: A cost measurement study for home-based telehospice service. J. Telemed. Telecare. 6(Suppl.1), 193–195 (2000)

    Article  Google Scholar 

  35. Bergmo, T.S.: An economic analysis of teleconsultation in otorhinolaryngology. J. Telemed. Telecare. 3, 194–199 (1997). doi:10.1258/1357633971931156

    Article  Google Scholar 

  36. Zollo, S., Kienzle, M., Loeffelholz, P., Sebille, S.: Telemedicine Iowa’s correctional facilities: initial clinical experience and assessment of program costs. Telemed. J. 5(3), 291–301 (1999). doi:10.1089/107830299312041

    Article  Google Scholar 

  37. Sicotte, C., Lehoux, P., VanDoesburg, N., Cardinal, G., Leblanc, Y.: A cost-effectiveness analysis of an interactive paediatric telecardiology network. J. Telemed. Telecare. 10(2), 78–83 (2004). doi:10.1258/135763304773391503

    Article  Google Scholar 

  38. Casey, F., Brown, D., Craig, B.G., Corrigan, N., McCord, B., Rogers, J., Mulholland, H.C., Quinn, M.: Value of a low-cost telemedicine link in the remote echocardiographic diagnosis of congenital heart defects. J. Telemed. Telecare. 4(Suppl 1), 46–48 (1998). doi:10.1258/1357633981931416

    Article  Google Scholar 

  39. Justo, R., Smith, A.C., Williams, M., Van der Westhuyzen, J., Murray, J., Sciuto, G., Wootton, R.: Paediatric telecardiology services in Queensland: a review of 3 years’ experience. J. Telemed. Telecare. 9(suppl.1), 57–59 (2004). doi:10.1258/1357633042614258

    Article  Google Scholar 

  40. McCue, M.J., Hampton, C.L., Malloy, W., Fisk, K.J., Dixon, L., Neece, A.: Financial analysis of telecardiology used in a correctional setting. Telemed. J. E. Health. 6(4), 385–391 (2000). doi:10.1089/15305620050503852

    Article  Google Scholar 

  41. Scalvini, S., Zanelli, E., Conti, C., Volterrani, M., Giordano, A., Castorina, M., Glisenti, F.: Potential cost reductions for the National Health Service through a telecardiology service dedicated to general practice physicians. Ital. Heart. J. 2(10), 1091–1097 (2001)

    Google Scholar 

  42. Shanit, D., Cheng, A., Greenbaum, R.A.: Telecardiology: supporting the decision-making process in general practice. J. Telemed. Telecare. 2(1), 7–13 (1996). doi:10.1258/1357633961929105

    Article  Google Scholar 

  43. Katz, M., Shapiro, C.: Technology adoption in the presence of network externalities. J. Polit. Econ. 94(4), 822–841 (1985). doi:10.1086/261409

    Article  Google Scholar 

  44. Tsuji, M. (2004) Economic evaluation of e-health System. Document RGQ14-1/2/021-E of International Telecommunication Union, 25–27 June

  45. Bradford, W.D., Kleit, A.N., Krousel-Wood, M.A.: RE RM.: 2004, Willingness to pay for telemedicine assessed by the double-bounded dichotomous choice method. J. Telemed. Telecare. 10(6), 325–330 (2004) doi:10.1258/1357633042601991

  46. Quershi, A., Brandling-Bennett, H., Wittenberg, E., Chen, S., Kvedar, J.: Willingness-to-pay for clinic versus telemedicine in patients with psoriasis and melanoma. Telemed. J. E. Health. 10(1), 29–78 (2004). doi:10.1089/153056204323057022

    Article  Google Scholar 

  47. Brandling-Bennett, H.A., Kedar, I., Pallin, D.J., Jacques, G., Gumley, G.J., Kvedar, J.: Delivering health care in rural cambodia via store-and-forward telemedicine: a pilot study. Telemed. E-Health. 11(1), 56–62 (2005). doi:10.1089/tmj.2005.11.56

    Article  Google Scholar 

  48. Bergmo, T.S., Wangberg, S.C.: Patients’ willingness to pay for electronic communication with their general pratictioner. Eur. J. Health. Econ. 8, 105–110 (2007). doi:10.1007/s10198-006-0014-5

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Telecom-Bretagne, Ecole Supérieure des Télécommunications de Bretagne, (LUSSI)/MARSOUIN/CREM, Département LUSSI, Logiques des Usages, Sciences Sociales et Sciences de l’Information, GET/ENST-Bretagne, Technopôle de Brest Iroise, CS 83818, 29238, Brest Cedex 3, France

    Myriam Le Goff-Pronost

  2. Department of Health Administration, University of Montreal, P.O. Box 6128, Station Downtown, Montreal, QC, Canada

    Claude Sicotte

Authors
  1. Myriam Le Goff-Pronost
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Claude Sicotte
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Myriam Le Goff-Pronost.

Appendix

Appendix

Detailed costs description (Tables 7, 8, 9 and 10)

Table 7 Details of fixed costs. Source of data: telemedicine sale contract and project budget reports
Full size table
Table 8 Details of variable costs. Source of data: hospitals and project budget reports
Full size table
Table 9 Details of patient costs. Source of data: Union rates applied in the health care sector
Full size table
Table 10 Details of travel expenses. Source of data: budget reports of the teaching and regional hospitals
Full size table

Rights and permissions

Reprints and permissions

About this article

Cite this article

Le Goff-Pronost, M., Sicotte, C. The added value of thorough economic evaluation of telemedicine networks. Eur J Health Econ 11, 45–55 (2010). https://doi.org/10.1007/s10198-009-0162-5

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10198-009-0162-5

Keywords

JEL Classification

Search

Navigation