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Maybe not. About 20 percent of all newborns have an "outie," also called an umbilical hernia. This is a bulge caused by the umbilical cord as it enters the baby's abdomen. After birth, as the umbilical cord heals and falls off, the opening to the abdomen usually closes spontaneously. Occasionally the opening doesn't close, and you may notice a bulging belly button, especially when there is increased abdominal pressure such as during bowel movements or crying. Although it may look impressive, the hernia usually causes no problems, as long as the baby is comfortable and the area is not tender or extremely swollen. As long as the bulge is soft and compressible, and is not causing your child any discomfort, it's not a problem. These hernias usually go away by 12 to 18 months, and surgery to close the hole is rarely necessary.
However, if you do notice any swelling, tenderness, or discoloration around the area, call your doctor right away. In very rare cases, a piece of the baby's intestine can get caught in the opening which can cut off blood flow to the area and require immediate surgery. Vomiting and constipation may also be symptoms of this problem.