The Role of Cost in Telemedicine Evaluation

Abstract

This study examined how health service provision via telemedicine and conventional medical systems affected a population's health status and whether the costs of health services play a deterministic role in allocating medical resources. Using the health indicator of the life expectancy at birth and applying the generalized methods of moments estimators in version 10.0 of the statistical software STATA by blending statistics and data with the survey data, the panel datasets of observations were covered over the period 1995-2004 for the Taiwan experience. Empirical evidence indicated that a 10% increase in the cost of each conventional health service increased the population life expectancy at birth by 0.12%. A 10% increase in gross domestic product per capita or the income level of the country increased the population's life expectancy at birth by 0.0023%. A 10% increase in population increased the population's life expectancy at birth by 0.0004%. A 10% increase in the ratio of telehealth services relative to conventional medical services increased the population's life expectancy at birth by 0.00019%. Interestingly, the cost of each telehealth service does not influence the population's health status. Furthermore, to reach the longevity at 76.25 years that is the current population's life expectancy at birth, an increase in health services via the telecommunications system of 243 times is able to reduce the cost of conventional health services by 69.5%. Accordingly, the cost of telehealth services does not play a deterministic role for guiding medical resource allocation and the provision of telemedicine is able to effectively save medical resources.