Telemedicine can increase accessibility to advanced medical technology at the university hospital for community residents living in a remote area. This paper focused on the economic evaluation of telemedicine to identify important factors influencing costs and benefits and to understand how these factors can be changed to improve economic performance of the telemedicine. When the telemedicine project currently operating in Korea was evaluated based on the traditional cost-benefit analysis, the results showed a heavy net loss with a B/C ratio of 0.17. As several values were added to the analysis based on Information Economics approach, B/C ratios steadly increased. When the saving of medical expenses from the early detection of diseases was taken into consideration, the ratio exceeded the break-even point. From the sensitivity analysis, a number of patients and the cost for equipment and communication were found to be the key factors for influencing economic performance of telemedicine.