With the ongoing discussion about whether both costs and outcomes should be discounted, alternate model construction reflecting these options can be very informative. Furthermore, the area of osteoporosis would dictate that age adjusted fracture rates would be a particularly influential component to consider in model construction. OBJECTIVE: This analysis reports the impact of stepwise inclusion of the discounting costs and outcomes and an age-adjustment on increment cost-effectiveness ratios. METHODS: The two alternatives included hormone replacement therapy with calcium supplementation compared with calcium supplementation alone in a cohort of women age 50 to 90 years. The effectiveness measure was fractures avoided. RESULTS: The base model discounts only costs with no age-adjustment for fracture rates (Incremental CER: $56,178.16, favoring hormone therapy). The model discounting both costs and outcomes with no age-adjustment for fracture rates, resulted in an incremental CER of $37,817.38 per fracture avoided. Age-adjustment of fracture rates resulted in incremental CER of $83,561.59 per fracture avoided (Discounted costs only) and $42,232.68 per fracture avoided (Discounted costs and outcomes). All models favored hormone replacement therapy and did not result in any decision changes. At the end of 40 years, markov analysis demonstrated that age-adjustment of fracture rates induced a shift to more desirable states. The most dramatic shift was 14.87 and 5.15 more women out of 1000 alive with no fracture in the hormone and calcium arms, respectively. In conclusion, the effect of discounting did not change the decision outcome of the osteoporosis markov model. However, the magnitude of the change in markov state composition was dramatic as a result of the age adjustment to fracture rates.