Joraaver Chahal

What's an IV Fluid Shortage?

I cannot believe how fortunate you are to read my blog, because it exposes you to problems you didn’t know about. Often, ones you didn’t need to know about. But you read anyway because my writing is fascinating, right? What bliss.

My surgery has been delayed to December 19th. I have not, in fact, been riding the high of some good vicodin. Woe is me.

The hospital called a week before my surgery to tell me that they were experiencing a shortage of IV fluids, which required rescheduling my surgery along with others in November. The next best date the nurse on the line could give me was December 19th. She did not comment on whether or not the IV fluid shortage would be resolved by then. I thanked them for the call, acknowledging the change in date. Because our healthcare system is amazing, my hematologist did not get the memo. I now have to pick up a prescription far before my surgery date, with a refill date much earlier than needed, and provide an explanation to the different members in my care team helping them connect the dots. Yipee.

But when I hung up, I was intrigued. Little ole me, finally impacted by a national problem occurring far away? So, of course I learned more, and today, you will too.

The New York Times published a good article discussing the nature of the shortage. The myopic summary is this: because of Hurricane Helene, flooding in North Carolina damaged a Baxter plant which produces “about 60 percent of the United States’ supply of fluids used in IV’s, for in-home dialysis and for people who rely on IV nutrition”. Then, as Hurricane Milton approached Florida, efforts were made to move fluids out of B. Braun’s plant in Daytona Beach, which makes one-fourth of the IV fluid in America, to a safer location farther north. Together they account for 85% of the IV fluid distribution in America. Because of the declared shortages, the FDA has authorized fluid imports from Baxter’s international plants. In the mean time, elective surgeries are exactly that, and can never be high priority than those who require dialysis or face otherwise life-threatening conditions. Hence the delay in my surgery.¹

But this begs the question:

As always, my life coach Chomsky has given me the ability to answer all complicated social problems we know nothing about.

Where Have All The Green Bills Gone?

Money is the best place to start when detangling complex geopolitical problems. I know this problem doesn’t sound political, but it only doesn’t to the naive capitalist who doesn’t want the government to undermine the efforts of private organizations, when private organizations practically run the government (hello DOGE).

Back in 2020, the pandemic caused a shutdown of a great many hospitals in more rural districts that were ill-equipped for the tasks. This pushed the residents to seek healthcare in the more populated hospitals. The influx of people looking for COVID-19 care created a drain on the financial resources of hospitals, because while treating the disease became a national concern, it wasn’t exactly profitable.

Elective surgeries are major revenue drivers for hospitals.² But as you can guess, the pandemic forced extreme delays or cancellations of elective surgeries, and along with the other needs COVID created, culminated in extreme deficits within hospital and health care systems. One report measured a net operating loss of $200 billion in a 4 month time span.⁶

Fast forward to now. There have been little to no changes in how operations are run within hospitals. In fact, one can imagine the current situation as identical to many corporate solutions to the pandemic, albeit minus some difference in employee status. Many corporations realized that they could continue operating in remote climates after the pandemic in order to cut costs around maintaining physical properties. I can’t justify the difference in the cost model, because I’m sure companies have offered benefits to employees who work from home, but I imagine the net gain to be had by not operating physical locations is partly why not much has changed. Those that force return to work policies do so in two minds. One is an aspect of culture, which I won’t argue for or against here. But the other, more glaring issue, is the fiscal elephant in the room: unused space, coming at great costs. Hospitals did the same, letting inertia guide them. Longer hours, more stress, increased burnout. But by not investing in more infrastructure to support or change the ecosystem, they retained the short-term margins they desperately needed to stay afloat.

Inventory and supply-chain management is tricky business too. The advent of Just-In-Time (JIT) inventory revolutionized cost management for organizations. The problem, as you can guess, is that JIT systems work well when life is swell, but crashes and burns when life takes a turn. The pandemic was that turn, forcing organizations to acknowledge the deficiencies in the system as shortages became rampant. JIT systems trade cost-savings in normal times for a drastic lack of readiness in uncertain times, prompting discussions about Just-In-Case (JIC) systems for contingencies.⁵ But because this is the contigency, not the norm, overreliance on a single sources for bulk import is always going to be more cost-efficient. And how often do you think a JIC system is going to be tested, just in case an emergency happens?

Finally, there’s the actual business of IV fluid production. Easy to make. Low margins. High regulatory barrier.² The three musketeers of poor business. It’s no wonder the current makers of IV fluid in America are businesses that have been alive for 60 years and have revenues in the billions of dollars. Propping a company up requires tons of funding to win even a portion of the market that incumbents have been serving for decades. And win by saying what? That their exports are faster? Local delivery means more continued service in black swan events? If that were true, it would have already happened.

What Can Be Done?

When a democracy’s people are in pain, they don’t turn to their lord and savior Elon Musk for help. They turn to the government, the only entity they know that is supposed to serve them regardless of stature, religion, or creed.⁷ The American government then turns to private corporations to aid them in this effort. It’s a ridiculous system that makes heroes out of problems that never should exist. I’m being a tad reductionist, since you can still rely on the privatization of work if the financial planning occurs within control of the government, but that isn’t what happens today.

Farming in America is possible thanks to subsidies. I’m going to rip a quote straight from the Cato Institute⁴:

Farmers can choose to participate in either ARC or PLC. At the same time, they can enroll in crop insurance, which has the same general purpose of ensuring high farm incomes. Thus, farmers can double-dip from at least two subsidy programs if their farming income falls short.

Farming gets a lot of protection from our goverment to avoid heavy reliance on exports. I thought healthcare would need the same treatment, but as you can see from the source, Mr. Edwards of the Cato Institute argues against the use of subsidies in farming for various reasons. I realize the spaces are entirely different, but it was important for me to read this reference because, while transplanting solutions from one industry to another sounds great in theory, the devil is always in the details.

It’s great to theorize about JIC systems that companies will put in place, but forgive the cynic in me for thinking that it’s a pipe dream. Upon scrutiny, it is execution that always falls miserably short. And when incentives don’t work, federal mandates become the only serious course of action.

There are other solutions, including improving the Strategic National Stockpile, or SNS, to guarantee availability regardless of any failures. But this solution, once again, asks the government to save everyone. Which is all the government does, whenever it can, depending on the party involved.

I didn’t dive more into the solutioning because it required intense domain knowledge, especially with regards to the chemicals and drugs that make the problem more complex than I’ve described. This small article summarizes the trends in manufacturing reliance and how geographically demanding the problem, and the solution, might be.³

I hope that was thought provoking. I have shared citations below for the articles and reports that elucidated the topic for me, but if anyone reading knows better, and would like to point out an error, whether it’s a particular point or one of my broad-sweeping statements that I should have left out of the final draft, let me know. After all, my top-down knowledge barely scratches the surface, and I know there are possible readers who work in public policy, or have worked in think tanks, that definitely know more.

P.S. I got lazy with my superscript positioning (before or after the punctuation mark?) and ordering of citations, forgive me.

1. Christina Jewett, “U.S. Races to Replenish Storm-Battered Supplies of IV Fluids at Hospitals,” The New York Times, October 9, 2024, https://www.nytimes.com/2024/10/09/health/hurricane-helene-iv-shortages.html.
2. Robert Glatter and Peter Papadakos, “What Will the IV Fluid Shortage Mean for Hospital Finance?” MedPage Today, November 18, 2024, https://www.medpagetoday.com/opinion/second-opinions/112537.
3. U.S. Pharmacopeia, “Geographic Concentration in Pharmaceutical Manufacturing: Risks and Opportunities,” Quality Matters, accessed November 20, 2024, https://qualitymatters.usp.org/geographic-concentration-pharmaceutical-manufacturing.
4. Chris Edwards, “Cutting Federal Farm Subsidies,” Cato Institute Briefing Papers, no. 123 (November 1, 2024), https://www.cato.org/briefing-paper/cutting-federal-farm-subsidies#conclusion.
5. Balkhi B, Alshahrani A, Khan A. Just-in-time approach in healthcare inventory management: Does it really work? Saudi Pharm J. 2022 Dec;30(12):1830-1835. doi: 10.1016/j.jsps.2022.10.013. Epub 2022 Nov 3. PMID: 36601508; PMCID: PMC9805965. 6. American Hospital Association, Hospitals and Health Systems Face Unprecedented Financial Pressures Due to COVID-19, May 2020, https://www.aha.org/system/files/media/file/2020/05/aha-covid19-financial-impact-0520-FINAL.pdf.
7. There’s a joke here.