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ABSTRACT
Health care costs in the USA have been increasing, with the largest percentage of revenues accruing to hospitals, health care professionals, and the pharmaceutical industry. Increases are likely associated with increases in care costs for chronic conditions, attributable in part to the aging of the population. Technology in the form of telehealth is one important tool to improve the efficiency of health care delivery. However, complex telehealth systems, particularly those relying on remote detection of health status, can also introduce challenges for management, due to system unreliability and particularly the cost of false alarms. A case study is used to illustrate these phenomena.