An empirical analysis of a telehealth system in terms of cost-sharing

We interviewed 348 users of a home telemonitoring system and asked questions about their willingness to pay (WTP). Assuming that the functional form of demand was logistic, the best estimate of the WTP was yen 4519 per user per month. We also analysed how the benefits of the system (expressed in terms of WTP) were attributed to four factors: stabilizing illness; enhancement of health consciousness; less anxiety in day-to-day life; and a decrease in medical expenditures. All except the last were significant. According to the resulting model, individual users should bear yen 2763 in costs, while society should reimburse yen 349. Surprisingly, the value of yen 2763 obtained here is very close to the amount ( yen 2500) actually charged by Kamaishi City.