The Economic Benefits of Breastfeeding: A Review and Analysis. By Jon

Weimer. Food and Rural Economics Division, Economic Research Service,

U.S. Department of Agriculture. Food Assistance and Nutrition Research 

Report No. 13.

Abstract

A minimum of $3.6 billion would be saved if breastfeeding were increased from

current levels (64 percent in-hospital, 29 percent at 6 months) to those recommended by the U.S. Surgeon General (75 and 50 percent). This figure is likely

an underestimation of the total savings because it represents cost savings from

the treatment of only three childhood illnesses: otitis media, gastroenteritis, and

necrotizing enterocolitis. This report reviews breastfeeding trends and previous

studies that assessed the economic benefits of breastfeeding.

Keywords: Breastfeeding, economic benefits, otitis media, gastroenteritis,

necrotizing enterocolitis.

		




 

Contents 


 

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Summary

Successfully promoting and supporting breastfeeding in the United States may

depend on persuading both mothers and society that breastfeeding is not only

nutritionally sound but economically beneficial as well. Current U.S. rates of

breastfeeding are 64 percent for mothers in-hospital and 29 percent at 6 months

postpartum, below the recommendations of the Surgeon General (75 and 50 percent, respectively). This analysis concludes that a minimum of $3.6 billion

would be saved if the prevalence of exclusive breastfeeding increased from current rates to those recommended by the Surgeon General. These savings would

result from reducing both direct costs (such as formula costs and physician, clinic, hospital, laboratory, and procedural fees) and indirect costs (such as time and

wages lost by parents attending to an ill child).

The American Academy of Pediatrics (AAP) and the American Dietetic

Association (ADA) endorse breastfeeding as the most beneficial method to

ensure the health and well-being of most infants. The U.S. Department of

Agriculture’s Special Supplemental Nutrition Program for Women, Infants, and

Children (WIC) has initiated a national program by Federal, State, and local

WIC programs to promote breastfeeding to WIC mothers. This report delineates that a number of studies demonstrate that breastfeeding improves infants’

general health and development and protects against a number of acute and

chronic diseases.

A number of reasons are cited for why more mothers do not breastfeed: aggressive formula product marketing, lack of support from friends/family, insufficient

knowledge among medical professionals, maternity hospital practices, cultural

attitudes, and an increasing number of women in the work force.

This report reviews the few studies that have been conducted in the United

States to assess the economic benefits of breastfeeding. Most earlier studies that

addressed this issue looked at the economic effect of breastfeeding in the context of comparing breastfeeding with formula feeding, both within and outside

the WIC program. These studies indicated that breastfeeding was economically

advantageous and that the promotion of breastfeeding could be an effective costcontainment measure. By and large, these studies looked at the economic effect

of breastfeeding at specific sites (State WIC clinic, local health maintenance

organization (HMO), or health clinic) and from an individual perspective. The

analysis reported in this study goes one step further in measuring the reduced

costs to society as childhood illnesses and premature deaths are prevented.

This analysis uses incidence rates from published studies to estimate the reduction in the number of cases of otitis media, gastroenteritis, and necrotizing enterocolitis that could be expected for varying prevalences of breastfeeding. Cost

data, both direct and indirect, were derived from published literature and

extracted from U.S. Government sources. This analysis indicated that a minimum of $3.6 billion would be saved if the prevalence of exclusive breastfeeding

increased from current rates to those recommended by the Surgeon General.

This figure reflected approximately $3.1 billion attributable to preventing premature deaths (necrotizing enterocolitis), and an additional $0.5 billion in annual savings associated with reducing traditional medical expenditures (for example, doctors’ or hospital visits, laboratory tests, among others) and indirect costs,

such as lost earnings of parents.

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The $3.1 billion figure probably underestimated the total savings likely because

it reflected the savings in treating only three childhood illnesses. That figure

also excluded the cost of purchases for over-the-counter medications for otitis

media and gastroenteritis symptoms, physician charges for treatment of necrotizing enterocolitis, and savings due to reduced long-term morbidity. Although

this study provided an analysis from a different perspective than previous studies, the results are consistent with those from prior investigations in demonstrating potentially substantial cost savings from breastfeeding.

Given that breastfeeding provides immunologic protection against a variety of

childhood illnesses, health care providers, corporate administrators, and State

and Federal policymakers may be able to reduce their programs’ medical costs,

over the long term, by promoting and supporting breastfeeding. However, further research on health and cost benefits from breastfeeding is needed, ideally,

large-scale studies for an entire range of child-related illnesses focusing on differences in rates of hospitalization, duration of hospitalization, health service

use, and medical costs between breastfed and formula-fed infants. Without such

studies, employers, insurance companies, and Federal health-policy decisionmakers are unlikely to provide financial incentives either to encourage breastfeeding or to encourage health providers, such as physicians, to provide better

support and care for breastfeeding mothers.

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Introduction

Breastfeeding is widely believed to be the most beneficial method of feeding for the health and well-being of

most infants.1 And, although breastfeeding is not recommended for all mothers (such as those who use

illegal drugs, receive cancer chemotherapy, or test

HIV-positive), public health experts, such as the

American Academy of Pediatrics (AAP), the American

Dietetic Association (ADA), and the Surgeon General,

endorse breastfeeding as the preferred infant-feeding

method in most cases. More recently, the AAP issued

a policy statement recommending that infants be

breastfed throughout their first year of life (American

Academy of Pediatrics, 1997).

The U.S. Surgeon General proposed to increase the

proportion of mothers who breastfeed their babies in

the early postpartum period to 75 percent nationally by

2000, and to increase the proportion who continue

breastfeeding until their babies are 5 to 6 months old

to at least 50 percent. According to the latest data

from Abbott Laboratories (1998), about 64 percent of

women giving birth in a hospital breastfeed, and

approximately 29 percent still breastfeed at 6 months.

Women in lower socioeconomic groups are less likely

to breastfeed and to breastfeed for a shorter time than

women in higher socioeconomic groups. Data from a

1996 national survey, for example, indicate that only

42 percent of women from households with incomes

less than $10,000 breastfeed at all and only 12 percent

breastfeed for 6 months (Abbott Laboratories, 1996).

Breastfeeding Trends

Almost all U.S. newborns were nursed up until around

1950. In the last 50 years, however, infant feeding has

changed markedly. After World War II, with the development and large-scale manufacture of infant formula,

formula feeding became the standard. Breastfeeding

fell by half between 1946 and 1956, and by 1967, only

25 percent of American infants were being breastfed at

the time of hospital discharge. The percentage of

infants being breastfed when they left the hospital then

began to increase steadily, reaching 62 percent in

1982, declined approximately 16 percent from 1982 to

1990, and increased slowly again to hover around 64

percent by 1998 (fig. 1). The prevalence of breastfeeding for 6-month-old infants paralleled that for newborns, although at a considerably lower level. In 1998,

about 29 percent of 6-month-old infants were being

breastfed.

Mothers may refrain from breastfeeding for a number

of reasons: aggressive formula product marketing; lack

of support from family and friends; insufficient knowledge among medical professionals about breastfeeding

techniques and challenges; maternity hospital practices

(short maternal stays, for example); religious beliefs;

cultural attitudes; and lack of public acceptance (Losch

et al., 1995; Weimer, 1999). All or some of these factors may come into play, but it is of interest that

increased formula feeding parallels a rapid increase in

the number of working women. Breastfeeding and

working outside the home are commonly believed to be

incompatible. A woman who works outside the home

must have a place and time to nurse her baby or express

and store her milk for bottle feeding. Increased participation of women in the labor force is frequently cited

for the low rates of breastfeeding (Cohen et al., 1995).

The increase in the number of working women since

World War II is one of the most significant social and

economic trends in modern U.S. history. In the United

States, the number of women in the labor force

increased by 178 percent between 1950 and 1985,

while the number of men in the work force increased

by only 47 percent (U.S. Bureau of Labor Statistics,

1998). By 1997, 59 percent of women (16 years and

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		 ✥ 

The Economic Benefits of Breastfeeding

A Review and Analysis

Jon P. Weimer

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older) worked, compared with 28 percent in 1940. In

1995, 41 percent of the employed women had children

under the age of 18, and 55 percent of this group had

returned to the workplace before their children’s first

birthday (Hayghe, 1997). Many workplaces seem not

to support breastfeeding or extraction of breastmilk in

the workplace, inhibiting breastfeeding after women

return to work.

Breastfeeding Health Advantages

In their endorsement of breastfeeding, entities such as

the AAP and the ADA cite studies to support the view

that breastfeeding improves infants’ general health,

growth, and development and protects against their

developing a number of acute or chronic diseases. As

reported in a 1997 policy statement issued by the AAP,

research in the United States, Canada, Europe, and

other developed countries suggests that breastfeeding

decreases the incidence and/or severity of diarrhea

(Dewey et al., 1995; Popkin et al., 1990), lower respiratory infection (Wright et al., 1989), otitis media

(Duncan et al., 1993; Owen et al., 1993), bacterial

meningitis (Cochi et al., 1986; Istre et al., 1985), botulism (Arnon, 1984), urinary tract infection (Pisacane,

1992), and necrotizing enterocolitis (Lucas and Cole,

1990). Other studies show that breastfeeding may protect against sudden infant death syndrome (Ford et al.,

1993), insulin-dependent diabetes mellitus (Gerstein,

1994; Mayer et al., 1988), Crohn’s disease (Koletzo et

al., 1989; Rigas et al., 1993), ulcerative colitis (Rigas

et al., 1993), lymphoma (Davis et al., 1988), allergic

diseases (Lucas et al., 1990; Saarinen and Kajosaari,

1995), and other chronic digestive diseases (Sveger,

1985). According to the AAP, breastfeeding also

enhances cognitive development (Lucas et al., 1992;

Morrow-Tlucak et al., 1988; Rogan and Gladen,

1993). A number of studies indicate possible health

benefits for mothers as well, specifically, a reduction

in hip fractures after menopause (Cumming and

Klineberg, 1993), less postpartum bleeding (Chua et

al., 1994), and reduced risk of ovarian cancer

(Rosenblatt and Thomas, 1993) and premenopausal

breast cancer (Newcomb et al., 1994).

Some studies contradict these findings and show no

protective effect of breastfeeding, thus raising doubt

about the importance of breastfeeding to public health.

Some studies’ methodology and analytical limitations

resulted in ambiguous findings:

Lack of control of confounding factors. The groups to

be compared should match as closely as possible for

potentially confounding variables that might affect

infants’ health, such as family size, mother’s education

level, socioeconomic status, whether a parent smokes,

and use of day care. Some of the studies conducted

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Figure 1

Breastfeeding in the United States has rebounded from low rates in the 1970’s

0

20

40

60

80

1970 72 74 76 78 80 82 84 86 88 90 92 94 96 98

Percent

Note: The percentage of infants breastfed at 6 months was not measured in 1970.

Source: Ross Laboratories Mothers’ Survey, Ross Products Division, Abbott Laboratories,1998

In hospital

6 months
before the mid-1980’s did not always match groups

by these important variables.

Problems related to the definition and duration of

breastfeeding. Explicit definitions of breastfeeding

practices are important for understanding and comparing studies. Some researchers classified infants as

“breastfed” if they received any amount of breast milk

at any time. Researchers may have called “breastfed

infants” those who were offered breast milk only once

or twice in the hospital, as well as those exclusively

breastfed for 4-6 months. Such a mixing of groups

studied could, for example, mask any protective effects

of breastfeeding. 

Problems related to “assignment” or reverse causality.

This is a little more subtle bias, but one that can have

an important impact. In studies of infant feeding and

health, this bias can stem from the fact that an infant’s

health can affect its feeding. So, if the mode of feeding is measured after an illness has begun, it may not

be clear, for example, whether a formula-fed infant

became ill as a result of formula feeding or whether

breastfeeding was curtailed as a result of the illness.

The illness in question, then, must be unambiguously

associated with the feeding method used just before

the onset of illness.

Economic Benefits

In addition to individual health benefits, breastfeeding

may provide significant economic benefits in terms of

defraying or reducing both direct and indirect costs.

The direct costs that might be reduced or averted

would relate, of course, to physician, clinic, hospital,

laboratory, and procedural fees. Other direct economic

benefits to a family may be no or reduced costs to buy

infant formula for the first year after birth. Possible

indirect costs may relate to time and wages lost by

parents (primarily mothers) attending to an ill child.

Ideally, attributing costs to time and wages lost by parents attending a sick child should be considered when

estimating the possible economic benefits of breastfeeding. Many women return to work before a child is

1 year old (Cohen et al., 1995). When these women

miss work, it often is because their infants are ill. As

breastfed infants have been shown to be less likely to

catch common infectious illnesses than formula-fed

infants, it is possible that mothers who breastfeed may

miss fewer days from work to care for a sick child

than mothers who feed formula.

Previous Studies

Relatively few studies have assessed the economic

benefits of breastfeeding in the United States. Some

earlier studies in the literature looked at the economic

effect of breastfeeding in the context of comparing

breastfeeding with formula feeding within the U.S.

Department of Agriculture’s Special Supplemental

Nutrition Program for Women, Infants, and Children

(WIC). WIC is the largest purchaser of infant formula,

buying approximately 40 percent of all formula sold in

the United States. The cost of infant formula distributed to WIC mothers in 1997 was $567 million after

formula company rebates of about $1.2 billion to WIC.

WIC has promoted breastfeeding, both inside and outside the Agency, including establishing a Breastfeeding

Promotion Consortium to exchange information and

collaborate about promoting breastfeeding. In 1996,

the Department initiated an ongoing national campaign

by Federal, State, and local WIC programs to promote

breastfeeding to WIC mothers and to support all

women who choose to breastfeed. However, advocates

of breastfeeding contend that if more women breastfed, overall WIC food costs would decrease. A 1989

reauthorization of the WIC program, providing both a

mandate and funding, allowed States to substantially

increase breastfeeding promotion. It should be noted

that WIC explicitly promotes breastfeeding because of

its health benefits, not because of possible reduced

food costs. 

The General Accounting Office (GAO) studied in 1993

the extent to which the WIC program promoted breastfeeding and examined how increased breastfeeding

would affect WIC food costs for a year (U.S. GAO,

1993). Estimating how increased breastfeeding affects

overall WIC food costs was complicated by a number

of factors, including the amount of supplemental formula breastfeeding infants sometimes use, the cost of

food packages given to different participants (food

packages provided to breastfeeding women often cost

more), and the number of women served. GAO concluded that if WIC were fully funded and served all

eligible recipients, any increase in breastfeeding would

decrease total food costs, as long as formula-supplemented breastfed infants received no more than 25 percent of the monthly amount of formula given to formula-fed infants. GAO estimated total WIC food costs

for fiscal year 1992, using 16 scenarios under varied

assumptions. For one scenario, for example, GAO

estimated that a 10-percent increase in breastfeeding

rates, with breastfed infants receiving 25 percent of the

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monthly amount of formula given to formula-fed

infants, would save the WIC program almost $408,000

per year. If breastfed infants received 10 percent of

the formula allowed to formula-fed infants, a 10-percent increase in breastfeeding rates would save the

program approximately $750,000. 

Tuttle and Dewey (1996) simulated a model of potential public cost savings for four social service programs—Medi-cal (Medicaid in California), Aid for

Families with Dependent Children (AFDC), WIC, and

Food Stamps—if breastfeeding rates increased among

Hmong (Laotian) women enrolled in WIC in

California. Initiation of breastfeeding among Hmong

immigrants in the United States is low (about 12 percent). In this analysis, the authors estimated the cost

savings if Hmong women breastfed fully for at least 6

months. The calculated savings were based on estimates of the resulting decrease in family size, infant

morbidity, and WIC formula purchases. The authors

used a 71⁄2-year interval to illustrate potential cost savings over time based on the effects of changing family

size. In part, cost calculations were based on expected

differences in fertility between breastfeeding and formula-feeding women because many Asian families use

breastfeeding to space births. Estimates of the impact

of breastfeeding on morbidity were based on two earlier studies that indicated breastfeeding protected

against gastrointestinal infections and otitis media

(Howie et al., 1990; Lopez et al., 1990). Costs for

WIC were calculated using figures for voucher packets

provided to California clinics (costs included rebates

given to WIC for family vouchers redeemed at grocery

stores). Other cost savings associated with reductions

were calculated on the basis of California Medi-Cal

reimbursement levels and standard AFDC and Food

Stamp payment rates. Costs for all four public assistance programs were projected over this 71⁄2-year period, and future values were discounted at 0, 2, and 4

percent.2 This study estimated yearly savings between

$450 and $650 (4 percent discount) and $590 and

$800 (0 percent discount) per family. Despite selfdescribed limitations of this study (for example, results

were specific to Hmong immigrant population and

focused only on savings to specific public assistance

programs), this analysis provided evidence that breastfeeding is economically advantageous.

Montgomery and Splett (1997), on the other hand,

tracked cohorts of exclusively breastfed and formulafed infants for 6 months in Colorado to compare WIC

costs and Medicaid expenditures. The breastfed sample included infants breastfed exclusively for at least 3

months. WIC costs included redeemed WIC vouchers

for formula and foods for infants and mothers, plus

administrative expenses for 6 months, minus manufacturers’ rebates for formula. The benefit measure was

determined from Medicaid expenditures for health care

initiated in the first 6 months for each infant. The

authors estimated that, compared with formula feeding, breastfeeding each infant enrolled in WIC saved

$478 in WIC costs and Medicaid expenditures (1993

dollars) during the first 6 months of an infant’s life, or

$161 after consideration of the formula manufacturers’

rebate. Although acknowledging possible incomplete

Medicaid expenditures or inconsistent or uneven

billing procedures, the authors argued that promotion

of breastfeeding among a low-income population

through nutrition programs, such as WIC, could effectively contain costs.

A few studies attempted to analyze the economic

advantages of breastfeeding outside the WIC program.

Jarosz (1993) conducted a study in Hawaii to estimate,

for the first 62 days of an infant’s life, the cost of

infant formula and the cost of food a mother needs to

consume to produce breast milk. The study assumed

that the dietary energy needs were the same in both

formula-and breast-fed infants, but that the total food

intake needed by the breastfeeding mother was 21 percent greater than that needed by her baby. Different

formula brands and food items for breastfeeding mothers were surveyed and priced from a sample of stores.

Based on the author’s estimates, it would cost an extra

$45 to $70 (1991 dollars) to feed a newborn formula

for 62 days or, according to the author, two newborns

could be breastfed for the cost of one newborn who is

formula-fed.

Hoey and Ware (1997) performed a pilot study on

newborns born to mothers in a health maintenance

organization (HMO) in North Carolina. They analyzed medical care and costs for the first 12 months

for infants that breastfed for at least 6 months and for

infants formula-fed since birth. Medical services

included office visits, drug prescriptions, and hospitalizations. Although both groups of infants had similar

numbers of office visits and pharmacy costs, breastfed

infants had fewer inpatient admissions, and their total

medical costs averaged $200 less than those of formula-fed infants. Again, this was a pilot study with a rel4 ✥ 		


	
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atively small sample size. The authors failed to control for demographic factors or determine the clinical

severity of each medical encounter. This study contributed to a body of evidence that points to potential

economic advantages of breastfeeding, however.

In a more comprehensive study, which estimated

national savings, Riordan (1997) calculated “additional” health-care costs incurred to treat four medical

conditions if infants were not breastfed. These four

medical conditions were infant diarrhea, respiratory

syncytial virus, insulin-dependent diabetes mellitus,

and otitis media. For each medical condition, Riordan

garnered reported incidence rates and treatment costs,

and calculated costs avoided by breastfeeding. Thus,

for example, Riordan indicated that 90,000 infants

were admitted to hospitals for respiratory syncytial

virus (Institute of Medicine, 1985). Riordan pointed 

to two studies that indicated that breastfed babies were

about half as likely to be hospitalized with respiratory

syncytial virus as formula-fed babies (Okamoto and

Orgu, 1989; Pullam et al., 1980). Citing an average

cost of $5,000 for hospitalizing an infant for this illness, and multiplying this figure by 90,000, Riordan

stated that $450 million was spent on hospitalizations

annually for this illness. Riordan indicated that half 

of this amount, $225 million, was an “extra” cost that

could be avoided by breastfeeding. Following this

rationale and procedure for each of the other three

medical conditions, Riordan estimated a range of $1.1

to $1.32 billion of extra health-care costs each year for

not breastfeeding. Given that Riordan cited a dollar

amount from a different year for each medical diagnosis, it was not clear if this range reflected an adjustment to a base year. Riordan assumed that admission

rates reflected infants not already breastfeeding—for

example, the 90,000-infant admission figure used for

the respiratory syncytial virus estimate assumed that

none of these infants were breastfeeding but that if

they did breastfeed, only 45,000 would have been

admitted—a tenuous assumption at best. Regardless,

Riordan indicated that these dollar estimates were conservative since they did not include parents’ lost work

time, were often confined only to hospital costs, and

did not include other costs associated with ill children.

In a more recent study, Ball and Wright (1999)

attempted to determine the excess cost of health care

services for three illnesses in formula-fed infants by

examining the frequency of health service use (e.g.,

office visits, hospitalizations, and prescriptions) in the

first year of life. The data were obtained from a study

conducted in Arizona that looked at the incidence of

lower respiratory illness and otitis media (Wright et al.,

1989), and a study conducted in Scotland that focused

on gastrointestinal illness among infants (Howie et al.,

1990). The authors estimated that, in the first year of

life, after adjusting for confounders, there were 2,033

excess office visits, 212 excess days of hospitalization,

and 609 excess prescriptions for these 3 illnesses per

1,000 non-breastfed infants compared with 1,000

infants exclusively breastfed for at least 3 months.

These additional services were estimated to cost

between $331 and $475 per never-breastfed infant during the first year of life. In this study, direct medical

costs were based on the experience of a large HMO

clinic in Arizona. The authors believed that these estimates of excess costs for care were conservative

because: (1) health care costs in Arizona are below the

national average, and (2) the study considered only

direct medical costs. Despite these limitations, this

study demonstrated rather substantial cost savings

expected during the first year of life.

Estimation of Benefits of

Increasing the Prevalence of 

Exclusive Breastfeeding

Despite caveats regarding methodology, all these studies contribute to a body of evidence that breastfeeding

may be economically advantageous as well as nutritionally sound. This report estimates the economic

benefits from a different perspective. For this preliminary analysis, the economic benefits of breastfeeding

reflect the cost savings that would occur if the nationwide prevalence of exclusive breastfeeding, either at

hospital discharge or at 5-6 months, increased from

present levels to that recommended by the Surgeon

General.

Methodology

Given that exclusively breastfed infants have fewer illnesses compared with formula-fed infants, it follows

that, as the prevalence of breastfeeding increases, the

total number of infants who become ill should decline.

The benefits of increasing the prevalence of breastfeeding at 5-6 months, for example, from 29 to 50 percent can be estimated by first calculating the number

of infants who are expected to become ill when the

prevalence of breastfeeding is 29 percent, and then calculating the number of infants expected to become ill

when the prevalence is 50 percent.

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This analysis uses incidence rates from the published

studies to estimate the reduced number of cases of illness that could be expected for varying prevalences of

breastfeeding for the following illnesses: otitis media,

necrotizing enterocolitis, and gastroenteritis. Cost

data, both direct and indirect, are derived from published literature and/or extracted from U.S.

Government sources.

Obviously, some illnesses related to infant feeding

may have major long-term impacts on quality of life—

sequelae that could increase costs significantly.

However, this analysis examines only short-term considerations—benefits or costs that can be assessed by

the end of the first or second year of life when morbidity rates of breastfed infants can best be compared

with those of formula-fed infants.

Otitis Media

The term “otitis media” (OM), or inflammation of the

middle ear, often is used to describe any one of a continuum of related diseases: acute otitis media, recurrent acute otitis media, otitis media with effusion, and

chronic otitis media with effusion. In 1990, OM was

the most frequently reported morbidity-related principal diagnosis for children under the age of 2 years

(Scappert, 1992). OM accounts for 20-40 percent of

office visits for children in the first 5 years (Faden et

al., 1998). Each year, there are an estimated 30 million visits to pediatricians to treat OM infections and

their sequelae, at an estimated cost of $1 billion. Most

initial episodes of OM occur when a child is 6 months

old (Facione, 1990).

Duffy et al. (1997), investigating the effects of breast

and formula feeding on episodes of OM (both acute

and with effusion), found that the incidence of OM at

6 months for exclusively breastfed infants was 25 percent, compared with 53 percent for formula-fed

infants. These incidence rates can be applied to the

U.S. population to determine the number of cases of

OM that can be expected for given prevalences of

breastfeeding. The latest birth statistics for the Nation

(U.S. Department of Health and Human Services,

2000) indicate there were 3.9 million births in 1998.

If the prevalence of exclusive breastfeeding at 6

months is 29 percent, we can expect 1,131,000 to

receive breast milk (i.e., 3.9 million x .29). According

to Duffy, we would expect approximately 282,750

cases (1,131,000 x .25) of OM for these infants in the

first 6 months. In this scenario, 71 percent of the newborns—2,769,000 infants—would receive formula.

Using Duffy’s incidence rate, we expect a total number

of OM cases for these formula-fed infants in the first 6

months to be 1,467,570 (2,769,000 x .53). Therefore,

for a 29-percent prevalence of exclusive breastfeeding

at 6 months, we expect a total number of cases of OM

in the first 6 months to be 1,750,320 (282,750 breastfed, 1,467,550 formula-fed).

This same procedure may be used to calculate the

number of cases of OM that would be expected for a

50-percent prevalence of exclusive breastfeeding at 6

months. In this case, 1,950,000 infants would be

breastfed. Of these infants, we would expect 487,500

cases of OM (1,950,000 x .25). We would also expect

that 1,950,000 infants would receive formula, of which

1,033,500 (1,950,000 x .53) would have an incidence

of OM. The total number of cases of OM under this

prevalency rate (that recommended by the Surgeon

General) would be 1,521,000. This represents a reduction of 229,320 cases from the 29-percent prevalence

rate scenario (1,750,320 – 1,521,000).

The savings due to this reduction can be calculated by

referring to published cost estimates. The Agency for

Health Care Policy and Research (AHCPR) conducted

a cost analysis using charges recorded in a health

claims data base compiled from over 100 insurance

companies (U.S. Department of Health and Human

Services, 1994). Indirect cost estimates were based on

time and wages lost by parents. The AHCPR estimated an average cost per case across all treatment categories (nonsurgical and surgical) to be $1,330 (1991

dollars). Adjusting this figure to 1998 dollars resulted

in an estimated cost of $1,592. Applying this cost estimate to the number of reduced cases of OM due to an

increase of breastfeeding prevalency at 6 months from

29 to 50 percent totals $365,077,440 ($1,592 x

229,320) in estimated savings. Table 1 summarizes

information about the number of cases of OM and

associated costs for varying prevalences of breastfeeding and formula feeding.

Gastroenteritis

Gastroenteritis, for this report, is described as vomiting

or diarrhea, or both, lasting as a discrete illness for a

24-hour period. Diarrhea, specifically, is traditionally

defined as three or more watery or semi-watery stools

in a 24-hour period. Gastroenteritis illness remains a

major cause of morbidity and mortality in developing

countries, and remains prevalent even in developed

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countries. It has been estimated that, in the United

States, 16.5 million children less than 5 years of age

have between 21 and 37 million episodes of diarrhea

annually (Glass et al., 1991). Breastfeeding is thought

to confer some protection against diarrhea in infants

because of two likely mechanisms: (1) supplementation with formula or other food carries risk for nonhygienic conditions of introducing pathogens to an

infant’s system; and (2) breastmilk contains

immunoglobulins that increase an infant’s resistance 

to infection. 

A number of studies, for example, Howie et al. (1990)

and Dewey et al. (1995), examined the differences in

morbidity between breastfed and formula-fed infants.

Dewey found that the incidence of diarrheal illness in

the first year for exclusively breastfed infants was 14

percent, compared with 31 percent for formula-fed

babies.

Again, if the breastfeeding prevalency rate at 6 months

is 29 percent, 1,131,000 babies are breastfed, and there

would be 158,340 expected cases of diarrheal illness

among these infants (.14 x 1,131,000). Seventy-one

percent, or 2,769,000 infants, would be formula-fed,

and there would be 858,390 expected cases of diarrheal illness among these infants, for a total number of

cases of diarrheal illness of 1,016,730. 

If the breastfeeding prevalence rate at 6 months were

to increase to 50 percent, 1,950,000 infants would be

breastfed, and there would be 273,000 expected cases

of diarrhea (1,950,000 x .14). For the other 50 percent,

or 1,950,000 infants that would receive formula, there

would be an expected 604,500 cases of diarrhea, for a

total case number of 877,500 under this prevalency

rate.

Increasing the breastfeeding prevalency rate at 6

months from 29 to 50 percent, then, would result in an

expected reduction of 139,230 cases of gastroenteritis

(1,016,730-877,500). Glass et al. (1991) found that 10

percent of gastroenteritis in infants prompted physician

visits, and that 1 percent led to hospitalization. 

If we assume that 10 percent of the 139,230 cases

would have led to physician visits, there would be

13,923 such visits. Avendano et al. (1993) estimated

that an average cost per episode of diarrhea (physician’s visit) was $289 (1993 dollars). This cost included traditional medical expenditures (for example,

office visit, laboratory tests, etc.) as well as indirect

costs associated with parents’ missed time from work

and extra childcare due to parents’ absence from the

home. Tucker (1998) estimated that the average hospital cost for a case of diarrhea would be $3,622, with

additional nonmedical costs (for example, forgone

earnings of parents, travel, etc.) estimated at $100

(1996 dollars). One percent of the 139,230 cases leading to hospitalization equates to 1,392 cases.

Converting these costs to 1998 dollars resulted in an

estimated savings for reduced physician visits of 

$4,552,821, and savings for reduced hospitalizations 

of $5,388,432, for a total savings of $9,941,253. Table

2 shows information on the number of cases of gastroenteritis and associated costs for varying prevalences of breastfeeding and formula feeding at 6

months. 

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		 ✥ 8

Table 1 Otitis media (OM): Number of cases and cost for various rates of breastfeeding at 6 months

29 282,750 71 1,467,570 1,750,320 2,786,509,440

40 390,000 60 1,240,200 1,630,200 2,595,278,400

50 487,500 50 1,033,500 1,521,000 2,421,432,000

60 585,000 40 826,800 1,411,800 2,247,585,600

Incidence in breastfed infants = 25 percent.

Incidence in formula-fed infants = 53 percent.

Bold-faced figures refer to examples cited in text.

Source: Duffy et al. (1997).

Prevalence OM cases Prevalence OM cases OM cases Cost of OM

Percent Number Percent Number Number Dollars

Breastfed infants Formula-fed infants Totals
Necrotizing Enterocolitis

Necrotizing enterocolitis (NEC) is the pre-eminent

gastrointestinal tract disease encountered in the neonatal intensive care unit. It is an important cause of

neonatal death and is the leading cause of emergency

surgical treatment in newborns (Neu, 1996). Over 90

percent of NEC cases affect premature infants.

Incidence approaches 12 percent of all premature

infants with birthweight of less than 1,500 grams

(Caplan and Mackendrick, 1993). The onset of NEC

is within the first 10 days of life in 90 percent of the

cases. Infants with NEC have various signs and symptoms, the most benign of which are feeding intolerance, abdominal distension, and changes in stool patterns. More severe characteristics are abdominal tenderness, bloody stools, intestinal gangrene, bowel perforation, sepsis, and shock (Caplan and Mackendrick,

1993). Lucas and Cole (1990) conducted a randomized controlled trial investigating the effects of breastfeeding and formula feeding. The incidence of NEC

in exclusively breastfed low-birthweight (LBW)

infants was 1 percent, compared with an incidence of 

7 percent in formula-fed LBW infants. Latest statistics

indicate that 291,000 LBW infants were born in the

United States in 1997 (U.S. Department of Health and

Human Services, 1999).3

Given that the onset of NEC generally occurs within

the first month of an infant’s life, using breastfeeding

prevalency rates at 6 months to estimate potential benefits is inappropriate. Rather, the breastfeeding prevalency rate at hospital discharge provides a more rational framework with which to gauge potential economic

benefits of this feeding mode, in terms of reducing the

number of infants who become ill.

If the prevalence of exclusive breastfeeding in the hospital were currently 64 percent, then we would expect

that 186,240 infants would be breastfed, among whom

we would expect 1,862 (1 percent) cases of NEC.

Thirty-six percent or 104,760 newborns would be formula-fed, and 7 percent of these, 7,733, would be

expected to contract NEC, for a total number of NEC

cases of 9,195.

At the Surgeon General’s recommended 75-percent

prevalency rate for breastfeeding in the hospital,

218,250 LBW infants would receive breastmilk with

an expected 2,182 cases (1 percent) of NEC. Under

this scenario, 25 percent or 72,750 LBW infants would

be formula-fed and 5,092, or 7 percent, of these LBW

babies would be expected to have NEC, for a total

number of cases of 7,274. Total reduction in the

expected number of LBW infants contracting NEC 

as a result of increased breastfeeding is 1,921 (9,195 -

7,274). 

According to Stoll (1994), 40 percent of infants who

have NEC have surgery. Data from a Government

nationwide study sample of inpatients (U.S

Department of Health and Human Services, 1996)

indicate that the average length of stay at a hospital

for an infant with NEC is 38.9 days (39, rounded), at

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Table 2 Gastroenteritis (GE): Number of cases and cost for various rates of breastfeeding at 6 months

29 71

40 60

50 50

60 40

Prevalence GE cases Prevalence GE cases GE cases Cost of GE

Percent Number Percent Number Number Dollars

Breastfed infants Formula-fed infants Totals

158,340

218,400

273,000

327,600

858,390

725,400

604,500

483,600

1,016,730

943,800

877,500

811,200

 72,593,361

67,387,320

62,653,500

57,919,680

Incidence in breastfed infants = 14 percent.

Incidence in formula-fed infants = 31 percent.

Bold-faced figures refer to examples cited in text.

Source: Dewey et al. (1995).

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an average cost of $118,240 (physician’s charges not

included). Assuming that 40 percent of the reduced

number of NEC cases would have had surgery (768),

savings from increased breastfeeding are estimated to

be a minimum of $90,808,320.

Additional societal costs saved from increasing the

breastfeeding rate from 64 to 75 percent relate to parents’ time and lost wages. We assume that at least one

parent would spend a minimum of 4 hours a day with

a hospitalized child during the 39-day hospital stay.

Data from the U.S. Bureau of the Census (1998) indicate that 91 percent of children under 18 years of age

live in households with their mother (mother only, or

mother with another adult). The Bureau of Labor

Statistics (1999) indicates that, for 1998, the mean

hourly earnings rate of female wage and salary workers was $9.37 (ages 20-34); for men in this age range,

the mean hourly earnings rate was $10.82. Assuming

that 91 percent of the 768 children who would require

NEC surgery would be cared for by their mother, the

resultant savings from an increased incidence of

breastfeeding is $1,021,742 (699 children x 4 hours x

39 days x $9.37). Assuming that the remaining 9 percent of the children would be attended by their fathers,

the estimated cost is $116,466 (69 children x 4 hours x

39 days x $10.82). Total costs attributed to parents’

time and lost wages, then, is $1,138,208.

Finally, based on research from a number of investigators, for example, Stoll (1994) and Jayanthi (1998), the

NEC mortality rate (again, the third leading cause of

death in newborns) is estimated to be between 15 and

25 percent (in the first year). Valuing premature death

at $8.3 million and using the midpoint of this mortality

rate range (20 percent), the total value lost is estimated

to be $3,187,200,000.4 Total savings—hospital care,

parents’ time and wages, and deaths—are estimated to

be $3,279,146,528. Table 3 depicts the number of

cases and associated costs of NEC for LBW infants for

varying prevalences of breastfeeding and formula feeding in the hospital.

)/		
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		 ✥ =

Prevalence NEC cases Prevalence NEC cases NEC cases Cost of NEC

Percent Number Percent Number Number Dollars

Breastfed infants (LBW) Formula-fed infants (LBW) Totals

Table 3 Necrotizing enterocolitis (NEC): Number of cases and costs for various rates of breastfeeding

for low birth weight infants (LBW) at hospital discharge

64 1,862 36 7,333 9,195 15,704,037,798

70 2,037 30 6,111 8,148 13,919,174,183

75 2,182 25 5,092 7,274 12,424,891,270

80 2,328 20 4,074 6,402 10,930,608,131

Incidence in breastfed infants = 1 percent.

Incidence in formula-fed infants = 7 percent.

Bold-faced figures refer to examples cited in text.

Source: Lucas et al. (1990).

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Conclusions

Federal and public-health policies promote breastfeeding because breastfed infants are healthier. Economics

can identify the economic consequences of increased

breastfeeding by measuring the reduction in medical

and other costs associated with having healthier

babies. Many prior studies looked at the cost-effectiveness of breastfeeding from the individual’s perspective. This study goes one step further to measure

reduced costs to society as childhood illnesses and premature deaths are prevented.

This preliminary analysis of breastfeeding and formula

feeding indicates that a minimum of $3.6 billion would

be saved if the prevalence of exclusive breastfeeding

increased from current rates (64 percent in-hospital, 29

percent at 6 months) to those recommended by the

Surgeon General (75 and 50 percent, respectively).

This figure reflects approximately $3.1 billion attributable to preventing premature deaths, and an additional

$0.5 billion annual savings associated with reducing

traditional medical expenditures (for example, office or

hospital visits, laboratory tests, etc.) and indirect costs

such as forgone earnings of parents, among others. 

This figure probably underestimates the total savings

likely. This figure represents only cost savings due 

to reduced costs to treat three childhood illness; it

excludes the cost of purchases for over-the-counter

medications for treatment of OM and gastroenteritis

symptoms, physician charges related to the treatment

of NEC, and cost savings due to reductions in longterm morbidity.

Although this analysis provided a perspective different

from that found in previous studies, the results from

this study are consistent with those from prior investigations in demonstrating that the potential for cost savings from breastfeeding is substantial. Costs of medical care continue upward. The Nation’s total spending for health care in 1995 was nearly $1 trillion

($988.5 billion), an increase of 5.5 percent from the

previous year, reflecting an estimated average of

$3,621 per person. This figure represents 13.6 percent

of the gross domestic product, a percentage approximately double that of any other developed nation (U.S.

Department of Health and Human Services, 1997).

Breastfeeding involves mostly primary and, to a lesser

extent, secondary prevention. Primary prevention is

any activity that prevents a disease from ever starting.

Secondary prevention is any activity that cures or

reduces the severity of a disease. As described in the

introduction, the literature indicates that breastfeeding

provides primary and some secondary protection

against viral, bacterial, and allergic diseases. The U.S.

Department of Health and Human Services’ Agency

for Health Care Policy and Research (AHCPR) or

other Federal cost-control deliberations do not include

breastfeeding, however. 

Given that breastfeeding does provide immunologic

protection against a variety of illnesses, health-care

providers, corporate administrators, and State or

Federal policymakers could see a decline in their costs

for pediatric care with an increase in breastfeeding.

Since managed-care plans emphasize the rewards for

preventing health problems and not using health services, their support for breastfeeding may be a costeffective way to keep insured clients healthy.

Undoubtedly, further research on health and cost benefits of breastfeeding is needed. Ideally, for an entire

range of child-related illnesses, large-scale research

studies should specifically focus on rates of hospitalization, duration of hospitalization, health-service use,

and medical costs among breastfed and formula-fed

infants. Much of the current available data are based

on studies in specific locales (for example, clinics or

local hospitals). Some data are available from largescale epidemiological research. However, as Riordan

(1997) pointed out, there are problems conducting epidemiological research on breastfeeding in this country,

which lacks a central data source for infant morbidity

and mortality. She notes, for example, that the only

purportedly reliable data about breastfeeding rates are

from an infant formula company. The Federal

Government (the Centers for Disease Control and

Prevention, for example) publishes data about selected

childhood diagnoses, but much of the reported data are

categorized according to age groups (usually 0-15

years) that do not separate out the first or second year

of life—years when breastfed infant morbidity can

best be compared with that of formula-fed infants.

 ✥ 		


	
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The data used in this report reflect estimates garnered

from incidence rates, treatment costs, and calculated

potential savings generated by breastfeeding based on

disparate, sometimes local sources. The beneficial

effects of breastfeeding are likely greater than those

shown here and in other studies. Given these caveats,

however, without such health and cost benefit studies,

employers, insurance companies and Federal health

policymakers are unlikely to provide financial incentives either to encourage breastfeeding or to encourage

health care providers (including physicians) to provide

better support and care for breastfeeding mothers.

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