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Abstract Background Over the next decade, the number of osteoarthritis consultations in health care is expected to increase. Physiotherapists may be considered equally qualified as primary assessors as physicians for patients with knee osteoarthritis. However, economic evaluations of this model of care have not yet been described. To determine whether physiotherapists as primary assessors for patients with suspected knee osteoarthritis in primary care are a cost-effective alternative compared with traditional physician-led care, we conducted a cost-effectiveness analysis alongside a randomized controlled pragmatic trial. Methods Patients were randomized to be assessed and treated by either a physiotherapist or physician first in primary care. A cost-effectiveness analysis compared costs and effects in quality adjusted life years (QALY) for the different care models. Analyses were applied with intention to treat, using complete case dataset, and missing data approaches included last observation carried forward and multiple imputation. Non-parametric bootstrapping was conducted to assess sampling uncertainty, presented with a cost-effectiveness plane and cost-effectiveness acceptability curve. Results 69 patients were randomized to a physiotherapist (n = 35) or physician first (n = 34). There were significantly higher costs for physician visits and radiography in the physician group (p