Objective To observe the therapeutic effect and cost-effectiveness of overall three-stage pattern differentiation for knee osteoarthritis（ OA）. Methods Totally 450 cases of knee OA were randomized into the treatment group of 300 cases and control group of 150 cases. The treatment group was treated by overall three-stage pattern differentiation according to X-ray grade. The patients at early stage were given minimally invasive needle knife. The patients at mid stage were given skin traction

Chinese herb fumigation and orthotic insoles. The patients at advanced stage were given skin traction and massage. The control group was given skin traction

Chinese herb fumigation

massage and Jingu Tongxiao Pill（ pill to relieve bone and muscle pain）. Both groups were treated for 4 weeks as one treatment course. The therapeutic effect

hospitalization time and costs were compared between groups. The Western Ontario McMaster Questionnaire（ WOMAC） score

visual analogue scale（ VAS） score

pain score

stiffness score and dysfunction score were observed before and after treatment in both groups. Results The total effective rate

hospitalization time and hospitalization cost in the treatment group was 94. 00%

（ 14. 34 ± 6. 18） d and（ 3929. 9 ± 1367. 0） Yuan respectively. The total effective rate

hospitalization time and hospitalization cost in the control group was 88. 67%

（ 20. 53 ± 2. 83） d and（ 6424. 2 ± 709. 72） Yuan respectively. The total effective rate of the treatment group was superior to that of the control group（ P < 0. 05）. Comparing with the control group

the hospitalization time and cost in the treatment group was significantly decreased（ P < 0. 05）. The pain score

stiffness score

dysfunction score

WOMAC score and VAS score were significantly decreased in both groups after treatment（ P < 0. 05）

especially in the treatment group（ P < 0. 05）. Conclusion The overall three-stage pattern differentiation is effective for OA with short hospitalization time and low hospitalization cost.