Hi H.,
My daughter was born with the umbilical cord wrapped around her neck, causing alot of bruising to her face. Because of that, she immediately became jaundiced. I also had a hard time producing milk that was healthy enough for her, so I gave her formula too. I split it up to every other bottle, and waited until she was no longer jaundiced, to stick with only breast milk. She didn't mind not recieving the formula at all, so it worked out great. The iron in the formula, absolutely helped.
Instead of hospitalizing the baby, though, we had to rent a bili-light bed for 4 days. Unless she was being fed, she had to lay on that thing all of the 4 days, and nights. It was so hard not to cuddle with her, but we knew it was for the best. Of course, it didn't hurt to cuddle with her when she was being fed, since she always took so long. :o)
Her jaundice did last for a while, in intermittent levels, but I found that it was best controlled when I also gave her the formula. Try to open the curtains at home, and let the light in to touch the baby's skin. I know it's a little tough right now, with the cold weather, but any natural light really does help.
My daughter, now 2, still gets the occasional yellow skin. I just have to remember to give her her vitamins (with extra iron), and she goes right back to normal.
Good luck!
Mari