Is health care a driver of local economic development?

I have raised this issue in past postings: can large medical facilities actually be a sustainable driver of local economic development. Part of my concern stems from the potential of telemedicine to replace travel to large medical hubs. In The Economist's recent Technology Quarterly, there was this great description of the power of telemedicine, based on the practice of Dr. Carel Van der Merwe on the isolated island of Tristan da Cunha (Telemedicine comes home):

A satellite-internet connection to a 24-hour emergency medical centre in America enables Dr Van der Merwe to send digitised X-rays, electrocardiograms (ECGs) and lung-function tests to experts. He can consult specialists over a video link when he needs to. The system even enables cardiologists to test and reprogram pacemakers or implanted defibrillators from the other side of the globe. In short, when a patient in Tristan da Cunha enters Dr Van der Merwe’s surgery, he may as well be stepping into the University of Pittsburgh medical centre.

But, what does that do for economic development around the Pitt medical center? Telemedicine allows for greater export of specialized care services. So overall activity at the medical center may go up. But it decreases all the auxiliary services, such as primary care and X-ray technicians, and all the economic spillovers (that cup of coffee in the lobby, the hotel room for the visiting outpatient or the family of the inpatient). What the net gain will be is unclear. What is clear is that it changes the nature of the economic development activity. And it calls into question the health-care based model of economic development.