Prisons in this hypothetical telemedicine system would operate at substantial savings (about $102 per encounter), because they would otherwise charter aircraft to transfer prisoners to Federal Medical Centers for psychiatric care and consultation and take prisoners to specialists outside the institutions. The research team did not examine how many other Federal prisons follow these practices in the quantities observed here. The team’s analysis of transfer patterns at other U.S. penitentiaries, however, shows that some -- Leavenworth and Lompoc, for example -- experience high transfer rates of psychiatric patients. Telemedicine systems in these prisons might be especially cost effective, assuming that they were configured similarly to the hypothetical system described earlier.

Where air charter transfers and external consultations are rare, the telemedicine system envisioned here would still be competitive with conventional practice. Even if no air transfers or external consultations were averted, the estimated $71 average cost per telemedical consultation still compares favorably to the average cost of a conventional in-prison specialist consultation ($108). Unit costs of telemedicine (excluding savings from external consultations and air transfers to FMCs) would not reach the level of conventional care until utilization fell to fewer than 50 patients per month.

Although the team expected to find that telemedicine’s benefits were highly dependent on the nature of the local market for consulting specialists, these benefits may be less sensitive to market conditions than anticipated. Analysis of contracts with specialist providers in a number of different Federal prisons indicates that the variation in compensation rates is quite narrow. In some regions, however, the availability of specialists at any price is limited. Telemedicine offers these prisons the ability to access such needed specialists. In addition, local market conditions may change in the future. Telemedicine offers access to specialists at government wages -- through arrangements with VA facilities, for example, which may be more stable than those in the open market.

State and local correctional authorities rarely transport inmates great distances for medical care. Thus the largest single-cost saving in this analysis -- the averted transfers to FMCs -- would have no counterpart in many jurisdictions. To determine whether these results could be applied to State and local correctional institutions, researchers would first have to determine whether other structural savings that would take the place of unique BOP practices could be identified. In the absence of such savings, the decision to implement telemedicine would turn on a comparison of unit costs of conventional care with unit costs of telemedical encounters. For this purpose, the costs reported here probably closely approximate the costs that another jurisdiction would face. Telemedicine, therefore, may save taxpayer dollars in systems hoping to reduce medical costs by averting prisoners’ visits to local communities. However, the greatest savings would occur in correctional systems using air charters for individual medical trips over long distances.