On the evaluation of economic benefits of Japanese telemedicine and factors for its promotion.

This paper attempts to estimate economic values of telemedicine and to extract factors that promote telemedicine through the use of survey data. This is the first analysis aimed at evaluating telemedicine in Japan. We utilized the Contingent Valuation Method and estimated demand functions of telemedicine. Because the number of institutions replying with willingness to pay (WTP) and willingness to undertake (WTU) is relatively small, the Kernel Estimation Method was applied. After estimating WTP and WTU, by multiplying the number of medical institutions currently implementing telemedicine, the whole value in Japan was obtained. By using the Tobit Model, factors that influence WTP and WTU were extracted. Estimated WTP was 35.23 dollars for teleradiology and 162.89 dollars for telepathology. WTU estimated was 39.81 dollars for teleradiology and 86.59 dollars for telepathology. Estimated economic benefits in Japan for 1 year were 1.27 million dollars for WTP of teleradiology and 278,600 dollars for telepathology. WTU is 10 million dollars for teleradiology and 393,400 dollars for telepathology. Medical institutions with the following characteristics tend to reply larger WTP: (1) university hospitals, (2) internal medicine, (3) radiology, and (4) use of video conference systems. Regarding WTU, the following characteristics influence WTU: (1) use of a personal computer, (2) use of telepathology equipment, (3) high satisfaction with the quality of telemedicine, and (4) experience base of telemedicine. Based on the nationwide survey on telemedicine, the total value of telemedicine in Japan was estimated. In addition to the evaluation, quantitative aspects of implementation of telemedicine, such as factors to promote telemedicine, are analyzed. These can provide useful information for further implementation of telemedicine not only in Japan but in other countries as well.