Economic Issues of Breastfeeding

Introduction

The economic issues that affect breastfeeding rates vary by perspective. For the mother/family, the key issues center on labor force consequences for working mothers as well as increased complexity and hence costs of breastfeeding versus formula feeding. The effects of counseling and education are poorly understood.

For employers, federal law requires unpaid time off and provision of appropriate space for breastfeeding mothers to pump. The wider issues center on paid maternal leave.

Health insurers and providers have to consider what services should be covered, at what duration and timing, and at what cost. How much of the cost might be recouped through future savings of infant and maternal healthcare costs?

For providers, creating Baby-Friendly hospitals seems paramount to success.

For society as a whole, although the gains from breastfeeding are at least partially understood, the overall case for breastfeeding remains incomplete economically. The societal issues include (a) mandating employer-paid maternal leave, (b) mandating health insurance coverage of specific breastfeeding aids and counseling, (c) incorporating “herd immunity” benefits from breastfeeding into public policy, and (d) treatment of public breastfeeding in the law (ranging at extremes from indecency laws to civil rights protection).

Much remains to be learned in these areas, most notably (1) what are the payoffs—month by month—that come from extending breastfeeding duration, and (related) how much does exclusivity matter? and (2) what interventions provide the greatest increases in breastfeeding success for mothers of different socioeconomic backgrounds? Much new research is needed to inform these important public policy issues.

Breastfeeding confers many health benefits on children, most important of which are more complete nutrition than is available in any commercial product and the enhanced development of the child's immune system, something that is not available at all in commercial products. This improved natural immunity reduces the infant's susceptibility to sudden infant death syndrome, necrotizing enterocolitis, otitis media, diarrhea, respiratory synovial virus, Haemophilus influenzae type B, herpes, urinary tract infections, allergies, asthma, eczema, and gastric reflux. These all help reduce healthcare costs in the infant's early years and later in life.

Other lasting effects occur later in life, including enhanced response to vaccinations, higher cognitive and social development of the child, improved child/parent bonding, and—an issue highly important for our society in the future—lower risk of subsequent obesity. ⁴ On the issue of cognitive development, a recent Australian analysis showed that boys breastfed at least 6 months had notably improved test scores over those not breastfed as much. ⁵ Compared with boys who had been breastfed for less time, breastfed boys scored an average of 10% higher in math and writing, 8% higher in spelling, and 6% higher in reading. Smaller, and not statistically significant, effects emerged for girls.

Each of these gains has potential for improving the child's well-being not only in health but in social and intellectual development, all of which, at least in concept, will improve children's school attendance and final educational attainment and thus lead to better job opportunities, higher wages, and the more productive life as a citizen of our nation.

Not all of these gains are captured by the decision-makers involved. For example, the healthcare gains redound partly to the family, partly to current health insurers, and partly to future health insurers, who may be different than the current insurers. The reduction in subsequent obesity has implications for many years of healthcare costs but probably is not captured immediately by either the family or the current health insurers. The improved cognitive and social development of the child is a “gift” from the parents to the children—primarily the benefits are bestowed on the child and subsequent generations. These and other issues highlight a series of reasons why one might not see optimal breastfeeding rates even among a highly informed and motivated population.

Is Breastfeeding Smart?: The Mother/Family Perspective

The mother, of course, is the focal point because she is the one doing the breastfeeding. To initiate breastfeeding, the woman may wish to take time off from work, which may or may not be paid by the employer. Thus, there is the immediate question of whether mothers face loss of income during the initiation of breastfeeding.

The legal standard in the United States requires far less maternity leave than do other nations. The Family and Medical Leave Act requires employers with 50 or more employees to provide up to 12 weeks unpaid, job-protected leave each year to eligible employees (those with over a year of employment with the firm). Most developed nations require, on average, about 16 weeks of fully paid maternity leave. California law requires 6 weeks of partially paid family leave. In the United States, most working mothers who take time off for maternity and child care use a combination of sick leave, vacation time, and unpaid leave. We have no hard evidence on the extent to which breastfeeding rates would increase if working mothers received fully paid leave of, for example, 16 weeks.

Once returning to the labor force, the breastfeeding mother will face other economic challenges, many of which hinge upon how much assistance the employer has provided, either in terms of a comfortable and quiet space for breast pumping or relating to questions about the mother's ability to leave job tasks immediately at hand as part of her employment. Many employers treat smokers better than breastfeeding mothers, in the sense that they sometimes provide for space to smoke and, often, at least do not discourage people taking “a smoke break” to smoke at their own convenience.

Time taken for breastfeeding is an issue that compounds for families with multiple children who are breastfed because the time taken out from work erodes the labor force experience and participation of the mother, making her potentially less attractive to employers for promotion and enhanced responsibilities. This can come either within the firm where she is currently employed or with reduced job mobility in the future.

The family also incurs various costs associated with breastfeeding, including breast pumps, and sometimes modifications in the mother's wardrobe. The mother may also find that she faces social pressures while trying to find a place to breastfeed her infant or to pump her milk for later infant feeding, both in public places and even in the homes of friends.

Mothers not in the workforce face similar issues, although they do not materialize in the form of a paycheck, but rather in time available to carry out the various activities of the mother working at home, including the usual repertoire of cooking, housekeeping, chauffeuring, babysitting, shopping, bookkeeping, and other home management activities. Economists have long understood that women who voluntarily stay at home to carry out these activities instead of taking positions in the labor force do so because the option of working at home is more economically beneficial, an issue sometimes significantly affected by our income and tax structure, because labor force earnings are taxed, whereas work at home is not. The point is that women working at home find the time spent in breastfeeding (to the extent it exceeds that from bottle feeding) cramps the time available for these other important activities and hence represents a real cost to the mother working at home similarly to the costs imposed on the mother working in the labor force.

Is Breastfeeding Support Smart?: The Employer Perspective

Some of the issues faced by the mother also affect the employer, except in the reverse direction. Time taken off by the mother for pumping and feeding represents a loss of the workers productive time, sometimes paid, sometimes not, but nevertheless a loss, creating less efficiency in the workplace or the requirement for finding substitute workers. The provision of appropriate space for pumping and/or breastfeeding, most desirably a quiet private space with comfortable furniture, creates a cost burden on the employer and is sometimes very difficult to provide in environments with limited free space. The Affordable Care Act of 2010 ⁶ required businesses to provide space for breast pumping, but exempted small businesses with “undue hardship,” presumably on the fear that the cost burden or space limitations would harm or even put small businesses out of existence. The Affordable Care Act coverage of breastfeeding is not unique in this way: Small business exemptions have arisen over and over again in issues relating to mandated benefits for families in health care and other areas, and even in some cases work-related health and safety issues.

Then there are the issues of healthcare costs and costs for various devices as well as counseling and support for the breastfeeding mother. Should the employer include these in health insurance coverage? Several issues come to bear in answering this question. The first question comes from the time frames in which the benefits are received. Employers are concerned about the bottom line of their health insurance premium costs, so they stand to benefit to the extent that the healthcare costs of the infant and mother decline because of the enhanced immunization benefits of breastfeeding. However, some (perhaps many) of the reductions in healthcare costs occur in later years and hence are of less importance to the employer for two reasons. The first is the simple time value of money—things occurring in the future are less valuable than things occurring in the present—just as banks pay you interest now for access to your savings money now. The second reason is that the future benefits may transfer to a different employer, if the mother changes jobs. Thus, the employer will capture only a part of the potential gains and healthcare costs, thereby reducing its incentives to provide coverage for support associated with breastfeeding. This concept, which is true for any preventive activity and for many acute treatment interventions that increase productivity, generally reduces employers' incentives to provide preventive and related activities in benefit packages. Reduced infant illness also has a secondary benefit of likely reducing parents' time taken away from work for sick time for the child. The extent of these gains, while in concept significant, have not, at least to my knowledge, been documented.

The “business case” for breastfeeding extends to other areas as well. Making the workplace attractive for women expands the pool of available candidates for key jobs, and support for breastfeeding mothers reduces employee turnover.

Many employers hold a very different view about the burden of health insurance premiums from that commonly espoused by economists. Economists who study such issues generally conclude that when employers offer fringe benefits to workers, including but not limited to health insurance, sick leave, vacation, retirement, and pension benefits, the ultimate economic burden falls on the worker, not the employer, because at least in the long run, the total wage compensation to the worker will equilibrate, so better benefit packages normally lead to reduced wages to offset the cost of the improved benefits. Many economic analyses show that the “incidence” of fringe benefits falls almost entirely on the worker, but employers commonly speak as if just the reverse is true. Of course, in our society, the preferred income tax treatment from our paid health insurance (employees do not pay income taxes on the value of the health insurance premiums, whereas they do pay income taxes on all other forms of compensation) distorts decisions in this regard, leading to more health insurance coverage than would otherwise be the case.

Is Breastfeeding Smart?: The Insurer Perspective

The first set of issues confronting insurers closely resembles some of those affecting employers. Should they include benefit coverage for breast pumps and other types of breastfeeding support? More and more, insurers are under pressure to keep healthcare premium costs stable and hence only add new benefits, particularly those involving prevention, to the extent that they reduce other insured healthcare costs immediately. That is, they often asked the question, “Will providing this benefit reduce other costs that more than offset the increased cost of this new benefit?” Of course, the same question seldom becomes an issue when the benefit is an acute treatment rather than a preventive activity, and this disparity in the way prevention and acute treatment are considered for coverage is one of the important problems in our overall healthcare and health insurance systems.

Health insurers also face the same question about benefits that occur now or in the future and have the same answer, only more so. Breastfeeding expenses now may produce health gains that occur later in the child's life, but the insurer is doubly likely not to capture these benefits and reduce costs later, because the employee may change employers and because the insuring employer may decide to switch health carriers, leading to the insurer losing any economic gains that might be captured from reduced future healthcare costs.

A final issue for insurers comes to determining what should be covered, and at what rate, if health insurance is to cover breastfeeding support, including pumps, lactation counseling, and other mechanisms that might arise. A whole set of issues emerges here, including what type of counseling should be covered? Lactation counselors? Physicians? Nurses? In each case, how many visits per month, and for what duration? Three months, 6 months, or more? Partly this puzzle emerges because we have little evidence to understand the additional benefits arising from more extended breastfeeding, for example, from 3 months to 6 months or from 6 months to 9 months. And we have almost no evidence about the effect of these various support mechanisms on the mother's eventual choices and behavior regarding breastfeeding of the infant.

Is Breastfeeding Smart?: Issues for Society

The key role of the Women, Infants, and Children (WIC) Program for infants in the United States (WIC supplies a substantial fraction of all infant formula, and their programs for supporting formula-fed and breastfed infants can importantly affect mothers' decisions on these issues) is perhaps the most important policy tool currently available to improve breastfeeding rates. Others at the Summit have analyzed the WIC program in detail. ⁷ Beyond the WIC program, numerous societal issues emerge.

The first of these societal perspectives arises from the concept of “herd immunity.” Herd immunity arises when a sufficiently large proportion of the population gains immunization; then others, even when not immunized, have reduced or eliminated risk of the underlying disease. The extent to which herd immunity matters depends on a wide variety of issues, including the transmission rates of the disease, the nature of social interaction of infected persons, societal norms (such as covering one's mouth when coughing, hand washing, or staying away from work when ill), and many others. But the concept of herd immunity in general means that private decisions about vaccinations for children and adults leads to an equilibrium level of vaccination that is too low, because each person's vaccination, no matter how inconvenient, expensive, or painful, confers a small benefit of reduced risk of infection upon all other people contacted by the vaccinated person, and people in general do not take such “external benefits” into account when they make their own decisions about vaccination. ⁸

To the extent that herd immunity matters in the many diseases that breastfeeding helps prevent, we can also anticipate that there is an inefficiently low level of breastfeeding from a societal point of view. The extent to which this matters has not been documented in any analyses that I know of, but particularly when one thinks about the reduced risk of many contagious diseases acquired by infants, the herd immunity benefits could be considerable. These have not been taken into account even by the best analyses of the economic gains from breastfeeding. ⁹

The educational gains and improved social skills of breastfed children also provide an additional benefit to society that is not wholly captured by the individual child and later adulthood. For example, the higher educational outcomes will, on average, increase the annual earnings of the individual, thus reducing the risk that he or she is on welfare or unemployed and hence receiving unemployment benefits. Their higher incomes will inevitably increase income tax revenues for federal, state, and relevant local governments. Improved educational attainment brings with it lower rates of smoking, less obesity, and less alcohol abuse, all reducing future healthcare costs and conferring other benefits on society. ¹⁰ Improved education has been the engine of economic growth for many societies. Thus, to the extent that breastfeeding increases educational attainment, it confers these many economic benefits upon all parts of society.

The final societal question takes us into various parts of the legal system. Many governments—local, state, and even federal—have dealt with public breastfeeding using laws relating to indecency, morality, and obscenity. Many of these archaic laws have changed, but much work remains to be done, particularly at the local government level, to assure that women who breastfeed in public are not exposed to risk of arrest or legal harassment on charges of indecent exposure and obscenity.

Perhaps a more significant issue emerges if one asks the question, “Is breastfeeding a civil right?” If our society concluded that breastfeeding was, in fact, a civil right, then depriving women of the right to breastfeed in public, or in private settings such as places of employment, would have a powerful effect eventually on social attitudes towards public breastfeeding, almost certainly reducing the social pressures and stigma currently associated with such activities. I suspect, although wholly without proof, that having the powerful forces of the Office of Civil Rights standing behind the rights of mothers to carry out breastfeeding and associated breast pumping would have a more salutary effect on the rate at which extended breastfeeding was carried out than any other legislation that I can envision.

Is Breastfeeding Smart?: Unresolved Medical and Clinical Issues

There are some important medical issues, currently not well understood, that have considerable effect on the overall economics of breastfeeding. These come in two sets of issues—how much gain do we get from additional months of breastfeeding and the related issue of how much of an improvement we see from exclusive as compared with supplemented breastfeeding and, separately, the extent to which various support programs (lactation counseling, financial incentives to mothers, etc.) increase rates of breastfeeding—either exclusive or supplemented.

The issue of exclusivity continues to raise its head among breastfeeding proponents. Although I am not an expert in this area, I have seen no pertinent evidence to suggest that exclusive breastfeeding provides any lasting benefits not available to supplemented breastfeeding of the same duration. From my understanding, the key issues in breastfeeding are duration, duration, and duration. If so, then any activity that extends the duration of breastfeeding, including partial supplementation, is preferred over anything leading to shorter durations of breastfeeding. If I am wrong—and I would welcome evidence on this issue—then breastfeeding supporters should focus almost wholly on duration rather than on exclusivity to obtain the maximum benefits from breastfeeding activities. This, of course, becomes an issue only after breastfeeding is well established, and exclusivity may be very important during initiation phases.

The next issue comes with understanding what incremental (marginal) benefits occur from increasing the duration of breastfeeding month by month. We can presume that 2 months is better than 1, 3 months better than 2, and 8 months is better than 7. But almost certainly the gains arising from adding the eighth month to 7 months are smaller than the gains from adding the third month to 2 months. This is the general law of diminishing returns in economics, and it almost surely holds in the case of duration of breastfeeding. But in order to know how much breastfeeding we really wish to encourage with social policies, insurance coverage, support for lactation counseling, and such, we really need to know what this duration–benefit curve looks like. We must carefully distinguish between the average benefit for X months of breastfeeding versus incremental benefit achieved by moving from X to X+1 months of breastfeeding.

We also have almost no evidence telling us what activities will enhance rates of breastfeeding, whether supplemented or exclusive, in various segments of our society. Because of their powerful role model status, would physician counseling matter most? If so, then perhaps the best solution is for insurers to create a specific CPT code for breastfeeding counseling for physicians. Or perhaps nurses or lactation counselors in the physician office are just as effective, but lower cost. If so, a separate CPT code is appropriate. Perhaps, also, the most effective mechanisms will not occur in the doctor's office, but in outside settings such as places of employment, churches, or even freestanding programs akin to Weight Watchers to control obesity or commercial, YMCA, or YWCA recreational centers for exercise and sports. If so, then we need to find a way to encourage such endeavors outside of the mainstream healthcare system. And perhaps using both “medical” and “social” approaches will prove best. Until we learn which of these activities provides the most effective encouragement for extending the duration of breastfeeding, we have no good mechanism for deciding how much to pay to support such activities, or through which mechanism.

It may be that the most effective mechanism is simply to pay the mother—give her a bonus for achieving various milestones of extended breastfeeding, a payment large enough to be economically significant and likely to alter behavior. But we don't know how much of a payment it would take to induce more extensive breastfeeding, and we don't know how such payments might have different effects for people with different income and educational attainment.

One way to break this informational logjam would be to undertake a large-scale randomized controlled trial that would answer many of these questions. Mothers and their infants would be randomized to various treatment arms that would include various types and degrees of counseling and other support, possibly coupled with various degrees of direct financial incentives to the mother for completing milestone steps in breastfeeding duration such as 3 months, 6 months, and 9 months.

Such a randomized controlled trial would require the cooperation of health insurers, government agencies and/or foundations, the medical and other related communities of healthcare providers, and of course appropriate researchers to conduct the trial. It would measure the effects of a set of interventions designed to increase the duration of breastfeeding, including financial payments to mothers, and support for breastfeeding counseling by some combinations of physicians, nurses, lactation counselors, and others as appropriate. Such a study is probably best conducted in a number of communities scattered around the country to capture various socioeconomic strata of our population and probably involving most, if not all, of the health insurance providers in each participating community, including private insurance and Medicaid. The best possible situation would include not only the randomized trial itself, but extended follow-up of the mothers, infants, and family in the study.

Any program that rewarded for actual duration of breastfeeding, either to the mother or to some sort of counseling and support entity, would necessarily require a nonintrusive yet accurate mechanism for actually measuring the duration of breastfeeding. Perhaps this could be done using the children's immune levels, or perhaps proof that the mother could express milk upon inspection in appropriate settings. But without a method of verification, any system that rewarded for completion of extended periods of breastfeeding would be subject to economic “gaming” that would almost certainly bring great inefficiencies to the program.

Conclusions

The desirability of breastfeeding is not under debate. Having said that, I think it also is fair to say that we know little about the following important economic issues:

• What are the incremental benefits from extending breastfeeding month by month?

This list creates an agenda for research for decades. It's time to get to work.