Home monitoring of chronic diseases could save up to $3 billion a year.
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According to a CSIRO study, patients using telehealth technology instead of visiting their doctor to manage their condition could result in savings of 24 per cent a year to the healthcare system.
The research was Australia's first large-scale telehealth trial.
Lead researcher Rajiv Jayasena said participants self-managed their conditions at home during the 12 month trial.
"Aged patients with multiple chronic diseases such as cardiovascular disease, diabetes or chronic lung disease account for more than 70 per cent of our health system expenditure," Dr Jayasena said.
"In addition to a 24 per cent savings of the Medical Benefits Scheme expenditure over one year, the trial also showed a substantial 36 per cent decrease in hospital admission and most importantly a 42 per cent reduction in length of stay if admitted to hospital during the 12-month trial.
"This is a huge saving when you consider the cost of a hospital bed per day is estimated to be around $2051 in Australia."
Patients also had a reduced mortality rate of more than 40 per cent.
During the study participants were provided with a telehealth device which linked them to a clinician via video conferencing.
They also had access to vital signs devices to monitor their ECG, heart rate, spirometry, blood pressure, oxygen saturation, body weight and body temperature.
Over the 12 months, participants reported improvements in anxiety, depression and quality of life as well as an improved understanding of their conditions.
Dr Jayasena said more than 500,000 Australians aged over 65 would be good candidates for this type of system.
