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OBJECTIVE: Health-e-Access, a telemedicine service providing care for acute illnesses in children, has delivered >6500 telemedicine visits from 10 primary care practices in Rochester, New York, by using telemedicine access at 22 child care and school sites. The goal was to assess the hypotheses that children served by Health-e-Access received health care more often for acute illnesses but had fewer emergency department (ED) visits and lower health care expenditures than did children without access through this service. METHODS: By using insurance claims, this case study compared utilization (starting in May 2001) of telemedicine, office, or ED care for children with versus without telemedicine access. Children included in analyses had > or =6 consecutive insurance-covered months through July 2007. Claims data captured all utilization. A total of 19 652 child-months from 1216 children with telemedicine access were matched with respect to age, gender, socioeconomic status, and season with child-months for children without telemedicine availability. RESULTS: The mean age at utilization was 6.71 years, with 79% of all child-months being covered by Medicaid managed care. The overall utilization rate was 305.1 visits per 100 child-years. In multivariate analyses with adjustment for potential confounders, overall illness-related utilization rates (in-person or telemedicine visits per 100 child-years) for all sites were 23.5% greater for children with telemedicine access than for control children, but ED utilization was 22.2% less. CONCLUSION: The Health-e-Access telemedicine model holds potential to reduce health care costs, mostly through replacement of ED visits for nonemergency problems. [ABSTRACT FROM AUTHOR]