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An anterior cruciate ligament (ACL) tear is a common knee injury, particularly among young and active individuals. Little is known, however, about the societal impacts of ACL tears, which could be large given the typical patient age and increased lifetime risk of knee osteoarthritis. This study evaluates the cost-effectiveness of ACL reconstruction compared with structured rehabilitation only.A cost-utility analysis of ACL reconstruction compared with structured rehabilitation only was conducted with use of a Markov decision model over two time horizons: the short to intermediate term (six years), on the basis of Level-I evidence derived from the KANON Study and the Multicenter Orthopaedic Outcomes Network (MOON) database; and the lifetime, on the basis of a comprehensive literature review. Utilities were assessed with use of the SF-6D. Costs (in 2012 U.S. dollars) were estimated from the societal perspective and included the effects of the ACL tear on work status, earnings, and disability. Effectiveness was expressed as quality-adjusted life years (QALYs) gained.In the short to intermediate term, ACL reconstruction was both less costly (a cost reduction of $4503) and more effective (a QALY gain of 0.18) compared with rehabilitation. In the long term, the mean lifetime cost to society for a typical patient undergoing ACL reconstruction was $38,121 compared with $88,538 for rehabilitation. ACL reconstruction resulted in a mean incremental cost savings of $50,417 while providing an incremental QALY gain of 0.72 compared with rehabilitation. Effectiveness gains were driven by the higher probability of an unstable knee and associated lower utility in the rehabilitation group. Results were most sensitive to the rate of knee instability after initial rehabilitation.ACL reconstruction is the preferred cost-effective treatment strategy for ACL tears and yields reduced societal costs relative to rehabilitation once indirect cost factors, such as work status and earnings, are considered. The cost of an ACL tear over the lifetime of a patient is substantial, and resources should be directed to developing innovations for injury prevention and for altering the natural history of an ACL injury.