Aim: To determine the cost-effectiveness of corticosteroid injection, physiotherapy and a combination of these interventions, compared to a reference group receiving a blinded placebo injection.

Methods: 165 adults with unilateral lateral epicondylalgia of longer than 6 weeks duration from Brisbane, Australia, were randomised for concealed allocation to saline injection (placebo), corticosteroid injection, saline injection plus physiotherapy (eight sessions of elbow manipulation and exercise) or corticosteroid injection plus physiotherapy. Costs to society and health-related quality of life (estimated by EuroQol-5D) over the 1 year follow-up were used to generate incremental cost per quality-adjusted life year (QALY) ratios for each intervention relative to placebo.

Results: Intention-to-treat analysis was possible for 154 (93%) of trial participants. Physiotherapy was more costly, but was the only intervention that produced a statistically significant improvement in quality of life relative to placebo (MD, 95% CI 0.035, 0.003 to 0.068). Similar cost/QALY ratios were found for physiotherapy ($A29\hspace{0.25em}343;GBP18\hspace{0.25em}962)andcorticosteroidinjection($A31 750; GBP20 518); however, the probability of being more cost-effective than placebo at values above $A50\hspace{0.25em}000perquality-adjustedlifeyearwas81$A228 000; GBP147 340).

Summary: Physiotherapy was a cost-effective treatment for lateral epicondylalgia. Corticosteroid injection was associated with greater variability, and a lower probability of being cost-effective if a willingness to pay threshold of $A50 000 is assumed. A combination of corticosteroid injection and physiotherapy was ineffective and cost-ineffective. Physiotherapy, not corticosteroid injection, should be considered as a first-line intervention for lateral epicondylalgia.