The influence of economic performance on telemedicine provision

Based on the experiences of Taiwan, this study aims to examine how country-level economic performance affects the provision of healthcare through telecommunications systems and how these health services influence individual-level health status. Regression analysis is undertaken and an ordinary least-squares method is applied. A panel dataset consists of a national sample over the period from 1995 to 2004. Empirical evidences show that increases in gross domestic product (GDP) increase the reported demand for telemedicine, but the price (cost) of telemedicine reduces that demand. In contrast, the price of conventional medical care and the indicator of healthcare environment (per capita national health expenditure) have no impact on the demand for telemedicine. The study provides quantitative estimates of the impact of GDP and telemedicine prices on the reported demand for telemedicine. A 10% increase in GDP increases the demand for telemedicine services by 3.9%. A 10% increase in the price of telemedicine reduces the demand for telemedicine by 7.4%. Furthermore, Taiwan's current GDP is used to estimate the unmet demand for telemedicine. The estimated current unmet demand for telemedicine is more than three times that currently being provided. In a well-run tele-healthcare system, the residents' capacities to generate income result in their health status being enhanced. Eventually, the economy will enjoy a higher level of welfare due to the impact of health and the provision of telemedicine. This is possibly a much more important source of economic performance and is derived from a policy aimed at promoting telemedicine.