OBJECTIVES: To study the cost of illness for patients newly diagnosed with benign prostate hyperplasia (BPH) in different scenarios. METHODS: published data provide the clinical results of current relevant management for new BPH patients: alpha-blockers (AB), watchful waiting (WW) or surgery (S). Based on these data, we simulated the history of patients with moderate BPH in a state transitional model, starting with one of the three treatment options. The model covers 10 periods of 1 year, and simulates real life treatment switches (e.g. from WW to AB, from one AB to another, from WW to S, etc…). Ten centres were asked to provide data on medical management at different states, based on their local audits. Resulting direct medical costs were calculated from the health care insurance perspective and applied into the model. Costs were discounted at 3%. The model was validated by comparison of predicted with observed surgery rates from a National hospital database (68 hospitals). RESULTS: patients starting on WW have the lowest cumulative costs (3,750 Euro, SD = 3,767 ), followed by patients starting with AB: 4,559 Euro for tamsulosin (SD = 1,702) and 4,744 Euro for terazosin (SD = 1,651). Introducing AB as second choice after WW has caused an observed reduction in S rates in Belgium. If AB would not exist, the increased and earlier use of surgery would lead to a predicted extra cost per patient of 60 Euro per year during the first 5 years, and in the long run to a break-even situation. The model overestimated observed surgical rates by 4.5%. CONCLUSIONS: The introduction of AB seems to lead to a delay of surgery in BPH patients, with short term savings and long term break-even. The real life short-term savings may be lower than the predicted, since the model overestimates the surgical rates.