Telemedicine system is one vital application that comes under live streaming. The application hits the criticality scenario and requires high Quality of Service when compared with other live streaming applications such as video conferencing and e-learning. In order to enhance better Quality of service in this critical live streaming application, the paper proposes Cloud-based Virtual Telemedicine System (CVTS) which handles technical issues such as Playback continuity, Playback Latency, End-to-End delay, and Packet loss. Here, P2P network is used to manage scalability and dynamicity of peers but the limitation associated with peer-to-peer streaming is lack of bandwidth both at the media source as well as among the peers which leads to interrupted services. The paper deals with the proposed work Dynamic Procurement of Virtual machine (DPVm) algorithm to improve QoS and to handle the dynamic nature of the peers. The performance evaluation was carried out in both Real-time and Simulation with Flash crowd scenario, and the Quality of service was maintained without any interruptions which proves that the proposed system shows 98% of playback continuity and 99% of the chunks are delivered on time and even if it fails, the chunks are retrieved from the Storage node with a maximum delay of 0.3 s. © 2019, Springer Nature Singapore Pte Ltd.