This study aimed to clarify how Traditional Chinese Medicine (TCM) influences several key outcomes in individuals diagnosed with osteoarthritis (OA), including pain relief, risk of hospital readmission, and likelihood of undergoing joint replacement. Patterns of Chinese herbal medicine (CHM) prescriptions were further explored to verify their connection with patient prognosis and overall quality of life.A retrospective cohort of 3,850 inpatients with OA admitted between January 2018 and December 2022 was identified through the hospital’s HIS database. Propensity score matching (PSM) was applied to balance baseline characteristics between comparison groups. A Cox proportional hazards model was utilized to quantify the effect of clinical and treatment-related factors on pain deterioration, readmission risk, and incidence of joint replacement. Kaplan–Meier survival analysis was performed to compare outcomes across different durations of TCM exposure. Additionally, data mining techniques—including association rule analysis, clustering, and random walk algorithms—were incorporated to evaluate the therapeutic role of TCM.TCM was used by 67.01% of OA patients (2,511/3,747). Following PSM, 1,228 TCM users were matched with 1,228 non-users. Rates of pain exacerbation, hospital readmission, and joint replacement were significantly higher in the non-TCM cohort than in TCM users (p < 0.05). According to the Cox model, TCM served as an independent protective variable. Relative to non-users, patients receiving TCM demonstrated a 58.4% reduction in pain deterioration, a 51.1% decrease in readmissions, and a 42% lower likelihood of joint replacement. Furthermore, individuals with prolonged exposure to TCM (>24 months) exhibited substantially fewer adverse outcome events than those with shorter exposure (≤24 months). Mining analyses additionally indicated that TCM interventions were associated with improvements in immune-inflammatory markers, VAS scores, and SF-36 quality-of-life metrics.TCM appears to function as a significant protective intervention for individuals with OA, with extended herbal medicine use conferring even greater prognostic benefits.