This paper reports on the cost effectiveness of a pediatric primary care system utilizing nurse practitioners (NPs) linked to a physician consultant through bidirectional interactive cable television. In addition, it discusses ways in which multiple uses enhance the economic feasibility of a telemedicine consultation link in a given geographic area. The overall consultation rate during periods of remote physician coverage was 21 per cent, compared with 24 per cent during on-site coverage. The telephone became a partial substitute for the TV for some uses but could not replace it in diagnostic decisions. As telemedicine is obviously underutilized in a one-satellite system, we compare a five-satellite network with other ways of delivering service. The resulting estimated cost of $18.50 an hour, or 2/3 of the cost of a physician providing direct care, includes a TV component of $5.30 an hour of use in a 1,750-hour year. The critical factor is that the NP can be a physician substitute if there is TV backup. The TV appears to prevent unnecessary referrals compared to a physician on site. Whether TV increases the length of the consult compared to the phone for conditions of equal severity is not entirely clear. If TV is compared to transporting a patient to a central place, the implicit value of transport time and disutility required to justify using TV is $7.55 per consult in a five-clinic network. Geographic and other barriers to physician availability enhance the potential for application fo telemedicine.