Background There are few cost-minimisation studies in telemedicine. We have compared the actual costs of providing a telepaediatric service to the potential costs if patients had travelled to see the specialist in person. Methods In November 2000, we established a novel telepaediatric service for selected regiol hospitals in Queensland. Instead of transferring patients to Brisbane, the majority of referrals to specialists in Brisbane were dealt with via videoconference. Since the service began, 1499 consultations have been conducted for a broad range of paediatric sub-specialities including burns, cardiology, child development, dermatology, diabetes, endocrinology, gastroenterology, nephrology, neurology, oncology, orthopaedics, paediatric surgery and psychiatry. Results During a five year period, the total cost of providing 1499 consultations through the telepaediatric service was A$955,996. The estimated potential cost of providing an outpatient service to the same number of patients at the Royal Children's Hospital in Brisbane was A$1,553,264; thus, telepaediatric services resulted in a net saving of approximately A$600,000 to the health service provider. Conclusion Telepaediatrics was a cheaper method for the delivery of outpatient services when the workload exceeded 774 consultations. A sensitivity alysis showed that the threshold point was most sensitive to changes related to patient travel costs, coorditor salaries and videoconference equipment costs. The study showed substantial savings for the health department, mainly due to reduced costs associated with patient travel.
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