We assessed the cost and benefits of tele-endoscopy clinics in a remote location in Scotland. Before the introduction of a tele-endoscopy service, patients whose symptoms suggested possible cancer of the airways had to travel to the mainland (to Aberdeen) to receive an endoscopy. The costs of staff, capital, disposables and travel were estimated for the tele-endoscopy clinic and for the conventional, mainland clinic. The benefits of the two types of clinic were estimated from a sample of the general public using a survey method called the discrete choice experiment. The average cost per patient was lower for the tele-endoscopy clinic (pounds sterling 353) than for the mainland clinic (pounds sterling 381). This was true if more than 27 patients were seen per year. Assuming equal waiting times, individuals preferred the tele-endoscopy clinic to the mainland clinic. The net benefits were larger for tele-endoscopy clinics as long as the additional waiting time was not longer than four weeks. Tele-endoscopy clinics in Shetland are an efficient alternative to conventional practice. The results are sensitive to both economies of scale and scope. The model can readily be applied to mainland communities outside the main population centres in Scotland.