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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 p = 0.01). Both groups improved their health-related quality of life 1 year after assessment compared with baseline. There were no statistically significant differences in QALYs or total costs between groups. The incremental cost-effectiveness ratio for physiotherapist versus physician was savings of 24,266 €/lost QALY (societal perspective) and 15,533 €/lost QALY (health care perspective). There is a 72–80% probability that physiotherapist first for patients with suspected knee osteoarthritis is less costly and differs less than ±0.1 in QALY compared to traditional physician-led care. Conclusion These findings suggest that physiotherapist-led care model might reduce health care costs and lead to marginally less QALYs, but confidence intervals were wide and overlapped no difference at all. Health consequences depending on the profession of the first assessor for knee osteoarthritis seem to be comparable for physiotherapists and physicians. Direct access to physiotherapist in primary care seems to lead to fewer physician consultations and radiography. However, larger clinical trials and qualitative studies to evaluate patients’ perception of this model of care are needed. Clinical trial registration The study was retrospectively registered in clinicaltrial.gov, ID: NCT03822533.