The imbalance in healthcare between urban and rural areas is still a problem in China. In recent decades, China has aimed to develop telemedicine. We assessed the implementation, utilization, and cost-effectiveness of a large telemedicine program across western China. In 2002-2013, a government-sponsored major telemedicine program was established by West China Hospital of Sichuan University (hub), covering 249 spoke hospitals in 112 cities throughout western China and in 40 medical expertise areas. We analyzed the cross-sectional data from 11,987 consultations conducted at West China Hospital using the telemedicine network over a 12-year period. The types of diseases as well as the diagnosis and treatment changes were assessed. We also performed a cost-savings analysis and a one-way sensitivity analysis. Of the 11,987 teleconsultations, we noted that neoplasms (19.4%), injuries (13.9%), and circulatory diseases (10.3%) were the three most common diagnoses. Teleconsultations resulted in a change of diagnosis in 4,772 (39.8%) patients, and 3,707 (77.7%) of them underwent major diagnosis changes. Moreover, it led to a change of treatment in 6,591 (55.0%) patients, including 3,677 (55.8%) changes not linked to diagnosis changes. The telemedicine network resulted in an estimated net saving of $2,364,525 (if the patients traveled to the hub) or $3,759,014 (if the specialists traveled to the spoke hospitals). The introduction of telemedicine in China, linking highly specialized major hospitals (hub) with hundreds of small rural hospitals (spoke), can greatly improve the quality, efficiency, and cost-effectiveness of healthcare delivery and utilization. This new Internet-based healthcare model should be utilized more widely in developing countries.