ORIGINAL RESEARCH Economic Evaluation of Telemedicine: Review of the Literature and Research Guidelines for Benefit–Cost Analysis Marı ´a E. Da´valos, Ph.D. (ABD), 1 Michael T. French, Ph.D., 2 Anne E. Burdick, M.D., M.P.H., 3,4 and Scott C. Simmons, M.S. 3 1 Health Economics Research Group, Department of Sociology, University of Miami, Coral Gables, Florida. 2 Health Economics Research Group, Department of Sociology, Department of Economics, and Department of Epidemiology and Public Health, University of Miami, Coral Gables, Florida. 3 TeleHealth Department, Miller School of Medicine, University of Miami, Miami, Florida. 4 Department of Dermatology and Cutaneous Surgery, Miller School of Medicine, University of Miami, Miami, Florida. Abstract Telemedicine programs provide specialty health services to remote populations using telecommunications technology. This innovative approach to medical care delivery has been expanding for several years and currently covers various specialty areas such as cardi- ology, dermatology, and pediatrics. Economic evaluations of tele- medicine, however, remain rare, and few of those conducted have accounted for the wide range of economic costs and benefits. Rig- orous benefit–cost analyses of telemedicine programs could provide credible and comparative evidence of their economic viability and thus lead to the adoption and=or expansion of the most successful programs. To facilitate more advanced economic evaluations, this article presents research guidelines for conducting benefit–cost an- alyses of telemedicine programs, emphasizing opportunity cost estimation, commonly used program outcomes, and monetary con- version factors to translate outcomes to dollar values. The article concludes with specific recommendations for future research. Key words: telemedicine, economic evaluation, benefit–cost analysis Introduction O ne of the most pressing challenges facing the United States today is the increasing cost of healthcare. Public and private organizations are actively seeking strategies to slow the growth of healthcare spending without compromising access, effectiveness, and safety. One such strategy may be found in telemedicine, whereby healthcare providers use telecommunications technology to deliver healthcare services to patients who are remotely located or have limited access to specialty care. Telemedicine has been implemented, for instance, to monitor and care for patients with heart conditions or diabetes through the transmission of echocardiograms for faster expert diagnosis and the frequent monitoring of patients with diabetes or heart failure via telephone or videoconference. In dermatology and ophthalmology, videoconferencing and image transmission allow for long-distance consultations with experts for faster diagnosis and treatment while also avoiding travel costs for patients and their families. Although telemedicine programs have expanded faster in advanced economies, the use of telemedicine in developing countries, particularly in re- mote and rural areas, has great potential to increase access to healthcare and technology, enhance knowledge transfer to local practitioners, and make healthcare more affordable for impoverished populations. Although telemedicine programs were initiated several decades ago and have experienced rapid growth ever since, the rigorous economic evaluation of such programs remains rare. This research gap has contributed to a lack of reliable, comparative economic data for policy makers, program administrators, and other stakeholders. In particular, a dearth of benefit–cost analyses, among other classes of DOI: 10.1089 =tmj.2009.0067 ª MARY ANN LIEBERT, INC. . VOL. 15 NO. 10 . DECEMBER 2009 TELEMEDICINE and e-HEALTH 933