Access to emergency treatment in rural areas can often mean the difference between life and death. Telemedicine technologies have the potential of providing earlier diagnosis and intervention, of saving lives and of avoiding unnecessary transfers from rural hospital emergency departments to urban hospitals. This study examined the hypothetical impact of telemedicine services on patients served by the emergency departments of two rural Missouri hospitals and the potential financial impact on the affected hospitals. Of the 246 patients transferred to the hub hospital from the two facilities during 1996, 161 medical records (65.4 percent) were analyzed. Using a conservative approach, only 12 of these cases were identified as potentially avoidable transfers with the use of telemedicine. Of these 12, 5 were admitted to the hub hospital after transfer. In addition to this conservative estimate of avoidable transfers based on current availability of resources in the rural hospitals, two more aggressive scenarios were developed, based on an assumption of increased service availability in the rural hospitals. Economic multipliers were used to estimate the financial impacts on communities in each scenario. This evaluation study demonstrates the potential value of telemedicine use in rural emergency departments to patients, rural hospitals and rural communities.