Early Intervention:

Federal Investments Like WIC Can Produce Savings

HRD-92-18: Published: Apr 7, 1992. Publicly Released: May 5, 1992.

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Pursuant to a congressional request, GAO: (1) developed a framework to estimate the cost-savings potential of early intervention programs, such as the Special Supplemental Food Program for Women, Infants, and Children (WIC); and (2) estimated the extent to which such programs can reduce the costs of other federally funded programs, such as Medicaid.

GAO used a framework that it developed to assess the costs and benefits of early intervention programs and found that: (1) providing WIC benefits to pregnant women pays for itself within a year; (2) prenatal WIC benefits have reduced the rate of low birthweight births by 25 percent and very low birthweight by 44 percent; (3) 1990 prenatal WIC benefits cost the federal government $296 million, but avoided over $472 million in expected first-year federal and state Medicaid expenditures; (4) over an 18-year period, an estimated $1 billion in federal, state, local, and private-payer expenditures could be averted as a result of WIC; (5) because of high initial medical costs, over three-fourths of the estimated savings due to WIC resulted from avoiding medical costs in the first year; (6) the formula used to distribute WIC funds to the states does not adequately consider the number of eligible persons in states and, as a result, some states cannot enroll all eligible pregnant women, while other states can only enroll lower priority applicants; (7) WIC only served an estimated 75 percent of all income-eligible pregnant women who would have given birth in 1990; and (8) providing WIC benefits to all income-eligible pregnant women who would have given birth in 1990 would have cost $407 million, or $111 million more than was spent, but would have returned more than $1.3 billion in avoided expenditures over the next 18 years.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: House and Senate staff indicated congressional interest in fully funding one WIC program by FY 1996, under existing eligibility categories. WIC funding in the FY 1994 appropriation bill would move WIC substantially toward that funding level. However, no congressional interest has been expressed in changing the basic eligibility groups, so action on this recommendation is unlikely to occur.

    Matter: In view of the cost savings that can be attributed to WIC, Congress should consider amending the Child Nutrition Act of 1966 to make all pregnant women with family incomes up to 185 percent of the federal poverty level eligible for WIC, irrespective of their level of nutritional risk, and to appropriate sufficient funds to ensure that such women receive WIC services.

  2. Status: Closed - Not Implemented

    Comments: No new early intervention programs have been initiated.

    Matter: When legislating new early intervention programs, Congress should require the administering department to identify and collect standard outcome, participant, and cost data to enable the department, where appropriate, to estimate potential program cost savings.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Education has sponsored cost and outcome information on some educational early interventions and has agreed to continue to do so in the future.

    Recommendation: The Secretaries of Health and Human Services and Education should assess ongoing early intervention programs for children, such as Head Start, the Childhood Immunization Program, and special education programs, and identify data needed to estimate cost savings, using our framework or a similar one; and, where appropriate, develop needed evaluation data and estimate the extent to which those programs provide cost savings to the federal and state governments or other beneficiaries.

    Agency Affected: Department of Education

  2. Status: Closed - Implemented

    Comments: The CDC Childhood Immunization Program has contracted to determine current cost savings of vaccination programs and entered into an agreement with the National Center for Health Statistics to collect data to estimate national vaccination coverage of preschool children. However, ACF has stated that it was premature to assess cost savings in Head Start and does not concur in the recommendation.

    Recommendation: The Secretaries of Health and Human Services and Education should assess ongoing early intervention programs for children, such as Head Start, the Childhood Immunization Program, and special education programs, and identify data needed to estimate cost savings, using our framework or a similar one; and, where appropriate, develop needed evaluation data and estimate the extent to which those programs provide cost savings to the federal and state governments or other beneficiaries.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Not Implemented

    Comments: GAO made this recommendation because the formula used in the past to distribute money to states was not based on measures of eligible population in the states. The formula left some states unable to enroll higher-priority eligible pregnant women, while other states could enroll lower-priority persons. According to USDA, since this recommendation was issued, WIC's funding increase has allowed virtually all states to serve all eligible pregnant women. USDA revised the formula to distribute funds to states. Over time, the new formula has lessened the discrepancies among states in their ability to serve their eligible populations. Therefore, even if WIC funding were to decrease in the future, states would not differ as significantly in their ability to serve higher-priority eligible persons, such as pregnant women, as they did in the past. Therefore, this recommendation should be closed as no longer applicable.

    Recommendation: The Secretary of Agriculture should revise the Department of Agriculture's (USDA) formula allocating WIC funding to state agencies. The allocation should be based primarily on the estimated number of eligible pregnant, breastfeeding, and postpartum women, infants, and children in the state, using the best currently available data.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Not Implemented

    Comments: HHS concurred but has not yet begun or planned such a study.

    Recommendation: The Secretary of Health and Human Services should examine current birth outcomes by income level, insurance status, and other characteristics he deems significant and advise Congress on whether WIC eligibility levels for pregnant women should be raised above the present income eligibility level for any specific type of low-income woman.

    Agency Affected: Department of Health and Human Services

  5. Status: Closed - Not Implemented

    Comments: The conference report on the fiscal year 1993 appropriations bill stated that no funding was to be used for the WIC child impact study, and, therefore, USDA cancelled its major study on WIC's impact on the health of children. USDA has published a followup study showing that WIC was associated with fewer very low birthweight births and reduced infant mortality among infants of Medicaid women who had also received WIC services prenatally, compared with infants of other Medicaid women in the same states. At the moment, USDA is not planning any further research on the health impact of WIC services on participants.

    Recommendation: The Secretary of Agriculture should also more fully examine the effect of WIC on infants, children, and postpartum women, and any associated cost savings.

    Agency Affected: Department of Agriculture

 

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