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This paper analyzes the effects of e-health systems on medical expenditures. An e-health system monitors the health condition of patients at home by transmitting the patients' health-related data to a remote medical institution via a telecommunications network, allowing patients to be monitored by medical institutions 24 hours a day. Previous research has identified the following effects of the e-health system: (i) reduced anxiety in day-to-day life; (ii) stabilization of illness; (iii) enhancement of health consciousness; and (iv) decrease in medical expenditures. In order to test the significance of these effects, we conducted a case study of Nishiaizu Town, which has been making full use of the system since 1994. Nishiaizu was the second local government in Japan to introduce the system; since then, the system has been the core of the town's health, welfare, and medical services. The authors conducted field research on Nishiaizu in 2000, 2001 and 2006, taking advantage of the town's readily available medical expenditure data. Our analysis compares the town's medical expenditures with the nationwide average for four distinct categories of patients, using difference tests of difference and Pearson correlations. The former test examines differences in expenditure levels, while the latter measures differences in expenditure trends. We compare these before and after the introduction of Nishiaizu's e-health system. We conclude that the e-health system may have had significant effects for residents classified as "Elderly" and "General." The former category includes most users of the e-health system in Nishiaizu. In order to make a more rigorous analysis, we require more detailed data, such as individuals' medical expenditures and their experiences using the system.