OBJECTIVE: To assess the clinical and economic consequences of different diagnostic strategies in newborns with suspected occult spinal dysraphism. METHODS: A decision-analytic model was constructed to project the cost and health outcomes of magnetic resonance imaging (MRI), ultrasound (US), plain radiographs, and no imaging in newborns with suspected occult spinal dysraphism. Morbidity and mortality rates of early versus late diagnosis of dysraphism and the sensitivity and specificity of MRI, US, and plain radiographs were obtained from the literature. Cost estimates were obtained from a hospital cost accounting database and from the Medicaid fee schedule. RESULTS: We found that the choice of imaging strategy depends on the underlying risk of occult spinal dysraphism. In low-risk children with intergluteal dimple or newborns of diabetic mothers (pretest probability: 0.3%-0.34%), US was the most effective strategy with an incremental cost-effectiveness ratio of $55 100 per quality-adjusted life year gained. For children with lumbosacral dimples, who have a higher pretest probability of 3.8%, US was less costly and more effective than the other 3 strategies considered. In intermediate-risk newborns with low anorectal malformation (pretest probability: 27%), US was more effective and less costly than radiographs and no imaging. However, MRI was more effective than US at an incremental cost-effectiveness of $1000 per quality-adjusted life year gained. In the high-risk group that included high anorectal malformation, cloacal malformation, and exstrophy (pretest probability: 44%-46%), MRI was actually cost-saving when compared with the other diagnostic strategies. For the intermediate-risk group, we found our analysis to be sensitive to the costs and diagnostic performances (sensitivity and specificity) of MRI and US. Lower MRI cost or greater MRI diagnostic performance improved the cost-effectiveness of the MRI strategy, whereas lower US cost or greater US diagnostic performance worsened the cost-effectiveness of the MRI strategy. Therefore, individual or institutional expertise with a specific diagnostic modality (MRI versus US) may influence the optimal diagnostic strategy. CONCLUSIONS: In newborns with suspected occult dysraphism, appropriate selection of patients and diagnostic strategy may increase quality-adjusted life expectancy and decrease cost of medical work-up.