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Costs per consult are a vital consideration in determining the viability of a telemedicine practice. This study estimated total, average, and marginal cost curves for an ambulatory pediatric telemedicine practice.The objective of this study was to estimate the costs of providing 386 telemedicine clinical consults at school clinics during one school year (September, 1999 to May, 2000). Cost curves were used to estimate costs of clinics with varying numbers of consults.This analysis used cost data from school clinics and a university medical center, which provided physician inputs. Standard cost-accounting procedures were used.Cost analyses were conducted using 10 school clinics. Three hundred eighty-six consults were completed with 286 children. Seventy-one percent of the children were black or Hispanic.The average costs of a telemedicine consult ranged from a high of $7328.17 when only one consult was done to a low of $173.13 when 129 consults were completed. At 165 consults, extrapolations from the cost curves suggested that the average costs of a telemedicine consult and a medical center pediatric ambulatory consult were approximately equal, a little more than $153. At 200 consults, telemedicine was estimated to be equal to or less costly than conventional ambulatory care visits by some 9.5%.Point and CI estimates of average costs suggest that telemedicine is cost competitive with conventional clinics when 200 or more consults are provided. The limited evidence available suggests that telemedicine consults also may be quality competitive.