Hip fractures are a burden to both the individual and the community. Only 50% of patients regain the mobility and independence they enjoyed 12 months before the hip fracture occurred. Direct costs are high: about US$7,000 for the immediate hospital care and $21,000 in total costs for the first year. The numbers of hip fractures worldwide are projected to increase from 1.7 million in 1990 to 6.3 million in 2050 because of the aging of the population; therefore, the total cost of these fractures will also increase. Based on today's currency values and a cost of $21,000 per patient, the total cost of hip fractures in the year 2050 will be $131.5 billion. The costs and morbidity associated with other fractures, such as vertebral fractures, are less well defined. Because hip fractures are associated with the highest and most well-defined costs, morbidity, and mortality of all fragility fractures, models with high sensitivity can now be devised for evaluating the costs and benefits of interventions. These models are constructed using data on incidence, morbidity, mortality, and costs of fractures, along with the efficacy of an intervention, to estimate the impact of that intervention against osteoporosis. According to one model, the cost per hip fracture avoided is $48,600 if a 62-year-old woman with osteoporosis receives treatment with a drug that is administered for 5 years at $830/year and produces a 50% reduction in fracture rate. The cost per life-year saved is $30,600, and the cost per quality-adjusted life-year is $14,900. By comparison, using this model, treatment of a 62-year-old woman with a diastolic pressure of 95 mm Hg using a drug costing $420/year that reduces risk of stroke by 38% results in costs of $144,200 per stroke avoided, $17,800 per life-year saved, and $14,300 per quality-adjusted life-year. Health economic models allow for changes in assumptions, such as extent of compliance, effectiveness of therapy, and risk of side effects. Cost-effectiveness varies according to treatment and is highly sensitive to the estimated efficacy of treatment, patient compliance, age of the patient at the start of treatment, and fracture risk assigned to the patient. Greater cost-effectiveness occurs when treatments are more efficacious and when they are directed at patients with the highest risk of fracture.