Abstract: Telemedicine can ease the contradiction between the rapidly increasing number of elderly people and the serious shortage of medical resources in China. However, the application of telemedicine in china is not ideal. Therefore, it is very necessary to study the effective policies of telemedicine. The government is the organizer and policy maker of a national medical system. The government’s medical policy determines the development of a country’s medical market. Therefore, the government is introduced as the decision-making subject into the game process of the medical system. By a medical system consisting of three major stakeholders: government, medical institutions and patients, based on the optimum of the patient’s social welfare, the patients’ social welfare level, social medical treatment cost, telemedical price and market share are studied under the different medical service price policy and payment policy.

Key words: telemedicine; social welfare; dynamic game; medical insurance reimbursement; price restriction