A simulation model of the effects of hormone replacement therapy (HRT) on hip fractures and their consequences is based on a population of 100,000 post-menopausal women. This cohort is confronted with literature derived probabilities of cancers (endometrium or breast, which are contra-indications to HRT), hip fracture, disability requiring nursing home or home care, and death. Administration of HRT for life prevents 55,5% of hip fractures, 22,6% of years with home care and 4,4% of years in nursing homes. If HRT is administered for 15 years, these results are 15,5%, 10% and 2,2%, respectively. A slight gain in life expectancy is observed for both durations of HRT. The net financial loss in the simulated population is 222 million Swiss Francs (cost/benefit ratio 1.25) for lifelong administration of HRT, and 153 million Swiss Francs (cost/benefit ratio 1.42) if HRT is administered during 15 years.