Telemedicine offers a unique opportunity for the delivery of healthcare to rural communities. For this opportunity to be realized, telemedicine services need to be planned carefully with attention to acceptance by clients and providers, economic viability and effective administration. To be sustainable, services for rural populations must be supported by a well-defined and resourced infrastructure. Managed care, considered as an approach to the effective delivery of appropriate services, is indeed the right tool for rural communities. Cost savings will be an important issue for health care managers, but rural telemedicine services should be considered in a broader economic perspective, taking account of both costs and benefits from various perspectives, and considering long term outcomes.