Should I Stay or Should I Go Now? (To the Hospital): Modeling the Impact of Introducing a Telemedicine System in a Remote Amazonian Community

The health needs of rural and remote populations are often not fully addressed as health care professionals agglomerate in urban areas. Telemedicine utilizes modern telecommunications technology to extend health care resources to these populations, overcoming obstacles of time and space. Thus far, scholarly literature on the impact of telemedicine has been limited to weakly persuasive empirical evaluations of specific interventions. This paper constructs an economic model of the introduction of a telemedicine system to a remote Amazonian community. It finds that patients do not seek health care if the quality of care available in the village is below a threshold value, as the opportunity cost of receiving care outweighs its health benefits. This implies that government investments should only target health if this threshold value can be met.