OBJECTIVES: Clinical evidence suggest that Grafton, a demineralized bone matrix, mixed with local bone (LB) can achieve similar fusion rates in lumbar fusion spinal surgery as iliac crest bone graft (ICBG). It would thus be possible to avoid harvest site morbidity. However, as of yet the cost difference between these alternatives have not been investigated. The objective is to study the cost for spinal fusion surgery with Grafton and LB mix compared with ICBG. METHODS: A modeling approach was taken. Additional resource use for second harvest site required for ICBG procedures were taken from published literature. U.K. costs were used and collected from publicly available price lists and published HTA reports. One way sensitivity analysis was performed. RESULTS: ICBG and a second surgery site due to bone harvesting was found in the literature to be associated with pain, difficulty walking and working, infections, hematomas, prolonged wound drainage, reoperations, additional surgery time and hospital stay. Health care costs for these resources were estimated to be £958 per patient. Total treatment cost for spinal fusion with Grafton and LB compared with ICBG was £10821 compared with £11021. Procedures using Grafton and LB mix were thus estimated to have lower costs of £200. Grafton and LB was still cost saving when no costs for complications were included in a one-way sensitivity analysis, and when other studies were used to inform additional surgery time and hospital stay with ICBG. Of nine scenarios ICBG was cost saving in one. CONCLUSIONS: In this study spinal fusion surgery with Grafton and LB was found to generate similar or lower costs than comparable procedures with ICBG. Given that previous studies have shown that the clinical outcomes are comparable between the two interventions Grafton mixed with LB can be considered a viable alternative to ICBG in spinal fusion procedures.