Background: New approaches on outpatient control are required and need testing to motivate and give feedback to the patients at home. Telemedicine has the capacity to achieve this, optimizing care through motivation and direct feedback adapted to milieu of the patient and at the same time to keep the total cost at a reasonable level. Objectives: We evaluated the economic and short-time health effect of two different ways of outpatient treatment in patients with type 2 diabetes (T2DM). A health economist calculated the total cost of replacing the standard care with telemedicine. Methods: Forty patients with T2DM in the outpatient department were prospectively randomized to either treatment at home by telemedicine with video conferences or the standard treatment with regular visits at the clinic over six months. The trial lasted for six months. HbA1c, blood glucose, 24-h blood pressure, cholesterol levels and albuminuria were measured. The telephone company, TDC, Denmark delivered and serviced a TandBerg E20 video telephone to the patients in the telemedicine group. The economic analysis was performed with a Danish hospital payer’s cost perspective. Cost data were based on the measured time consumption per home-based video telephone, consultations at out-patient clinic, telemedicine set-up equipment, and hospital operating cost. Sample size calculation concluded that 11 patients were needed in each group. Results: The reductions in the two treatments resulted in differences between telemedicine vs. standard, in HbA1c (9.1 to 7.7 % vs. 8.1 to 7.2 %), mean blood glucose (12 to 9.9 mmol/L vs.10 to 8.7 mmol/L), and cholesterol (3.8 to 3.4 vs. 4.3 to 3.9 mmol/L). Total cholesterol was different at three and at six months between the two groups (P < 0.05). Similar values were found at all time points in the two groups in LDL, body weight, and diurnal blood pressure. At a six months follow-up, the standard care proved more costly (53.9 vs. 41.3€ per 1 % HbA1c reduction, standard care vs. telemedicine). The calculation of a basis case from any starting point showed a potential extra cost €33.6 per reduction of 1 % HbA1c. An alternative scenario analysis was made to capture costs of using the physician consultant wage instead of the nurse at the out patient clinic and showed that savings were still possible even with change of person (49.4 instead of 41.3€ per reduction per % HbA1c, physician vs. nurse). Conclusions: We demonstrated that telemedicine is a cost-effective option in the treatment of T2DM with a better outcome in blood glucose and lower cost after six months of treatment. The setting of this trial warrants further projects in this field Background: New approaches on outpatient control are required and need testing to motivate and give feedback to the patients at home. Telemedicine has the capacity to achieve this, optimizing care through motivation and direct feedback adapted to milieu of the patient and at the same time to keep the total cost at a reasonable level. Objectives: We evaluated the economic and short-time health effect of two different ways of outpatient treatment in patients with type 2 diabetes (T2DM). A health economist calculated the total cost of replacing the standard care with telemedicine. Methods: Forty patients with T2DM in the outpatient department were prospectively randomized to either treatment at home by telemedicine with video conferences or the standard treatment with regular visits at the clinic over six months. The trial lasted for six months. HbA1c, blood glucose, 24-h blood pressure, cholesterol levels and albuminuria were measured. The telephone company, TDC, Denmark delivered and serviced a TandBerg E20 video telephone to the patients in the telemedicine group. The economic analysis was performed with a Danish hospital payer’s cost perspective. Cost data were based on the measured time consumption per home-based video telephone, consultations at out-patient clinic, telemedicine set-up equipment, and hospital operating cost. Sample size calculation concluded that 11 patients were needed in each group. Results: The reductions in the two treatments resulted in differences between telemedicine vs. standard, in HbA1c (9.1 to 7.7 % vs. 8.1 to 7.2 %), mean blood glucose (12 to 9.9 mmol/L vs.10 to 8.7 mmol/L), and cholesterol (3.8 to 3.4 vs. 4.3 to 3.9 mmol/L). Total cholesterol was different at three and at six months between the two groups (P < 0.05). Similar values were found at all time points in the two groups in LDL, body weight, and diurnal blood pressure. At a six months follow-up, the standard care proved more costly (53.9 vs. 41.3€ per 1 % HbA1c reduction, standard care vs. telemedicine). The calculation of a basis case from any starting point showed a potential extra cost €33.6 per reduction of 1 % HbA1c. An alternative scenario analysis was made to capture costs of using the physician consultant wage instead of the nurse at the out patient clinic and showed that savings were still possible even with change of person (49.4 instead of 41.3€ per reduction per % HbA1c, physician vs. nurse). Conclusions: We demonstrated that telemedicine is a cost-effective option in the treatment of T2DM with a better outcome in blood glucose and lower cost after six months of treatment. The setting of this trial warrants further projects in this field