Background: Telemedicine as a technology is expected to resolve issues such as doctor shortages and disparities in medical services. However, high costs of system installation and maintenance inhibit its widespread use.Introduction: This study involved a cost minimization analysis for installation of a teleradiology system in the Hokkaido prefecture of Japan. Conditions under which system utilization is cost-efficient and system utilization is effective for cost reduction were analyzed.Materials and Methods: A cost minimization analysis was conducted using three geospatial points of 50, 100, and 200 km from Sapporo city, the prefectural capital of Hokkaido, assuming a central imaging diagnosis center in Sapporo. The analysis was conducted from the standpoint of both patients and requesting hospitals.Results: From the patient's standpoint, a cost reduction effect was observed at all three distances from system installation. In contrast, from the hospital's standpoint, a cost reduction effect was found only when teleradiology examination was conducted from a distance of at least 100 km from Sapporo.Discussion: Results show that the cost reduction effect for patients increased as the travel distance increased. Although the teleradiology service is beneficial for a wide range of patients, the financial burden on requesting hospitals is significant.Conclusions: The following conditions were found necessary to reduce the requesting hospital's financial burden: the hospital should be far from the imaging diagnosis center, an inexpensive system is to be selected, and the system needs to be utilized continuously.
Keywords: business administration; information management; policy; telehealth; telemedicine; teleradiology.