Saline exposed the risk that hides in a hospital’s cheapest line items
One flooded Baxter plant put IV fluids on allocation nationwide. Low-cost essentials concentrate supply because price pressure rewards scale, so health systems need to manage them by clinical criticality, through four levers that spend-based purchasing ignores.
Looking Back revisits one week at a time, from January 2020 to today, and asks what it meant for the banks, health systems and public agencies we serve. The series was written in 2026, with the benefit of hindsight, and each article says which week it looks back on.
The week
Flooding from Hurricane Helene forced Baxter International to shut its North Cove facility in Marion, North Carolina, at the end of September 2024. The plant was the company’s largest and, according to Baxter and the American Hospital Association, produced about 60 percent of the IV solutions used in the United States. In early October Baxter placed IV and peritoneal dialysis solutions on allocation, limiting customer orders to a share of their usual volumes. Hospital associations warned of shortages. Many health systems activated conservation measures, such as moving some patients from IV to oral hydration, switching some IV medications to push or oral forms, and in some cases postponing elective procedures. The FDA and HHS worked with manufacturers on measures including temporary importation of IV fluids from Baxter facilities abroad and expanded output from other suppliers.
A bag of saline is among the cheapest items a hospital buys and among the most essential. Before October 2024, few boards would have asked where it came from. North Cove showed why they should. A single flood at a single site changed care across the country within days.
The concentration was not an accident. In low-margin products, the competitor that survives is the one with the largest and most efficient plant. Purchasing teams measured on unit cost reward that scale every year, and the market narrows to a few sites. No individual health system can redesign that market. Each can, however, manage its own exposure through four levers that act on different things: information about where supply comes from, demand for the product, the contractual terms of supply, and physical buffers. Together they cover every way a hospital can change its position in a shortage, and none duplicates another.
Information: finding the single points of failure
Most health systems know their suppliers. Fewer know their suppliers’ plants, and fewer still know their suppliers’ suppliers. A distributor may offer several brands that come from one facility. A product with two listed sources may share a single sterile component or container maker.
The work is to map critical products to manufacturing sites, prioritized by clinical criticality rather than by spend. A short first list might cover IV solutions, certain sterile injectables, contrast media, heparin and a handful of single-source devices. Group purchasing organizations, distributors and FDA shortage data can help, but the health system has to ask the question and keep the answer current. A useful output is a one-page register: product, sites, share of supply from the largest site, days of stock on hand, and the clinical owner for conservation.
Demand: conservation that does not harm patients
In the first weeks of a shortage, demand is the only variable a hospital controls. After North Cove, many systems found that part of their IV fluid use was habit: maintenance fluids left running after they were needed, IV medications given where oral forms would do, and large-volume bags used for small-volume tasks.
Conservation needs pharmacy, nursing and physician leaders acting together, with protocols approved in advance. Changes to electronic health record order sets and defaults change practice faster than memos. Organizations that kept protocols from the 2022 contrast media shortage moved faster in 2024. The tracking matters as much as the protocol. A daily view of usage against allocation, by unit, lets leaders see where conservation is working and where it is not. Safety review belongs in the same loop. A pharmacist or quality lead should check substitutions, such as IV push in place of infusions, for errors and adverse events, so that saving supply does not quietly add clinical risk.
Some conservation should outlast the shortage. Switching appropriate patients to oral hydration earlier, and using smaller bags for drug dilution, reduces cost and waste in normal times. Making those changes permanent shrinks the next shortage before it arrives.
Contract terms: how allocation works when there is not enough
When a manufacturer goes on allocation, it usually bases each customer’s share on historical purchases. Customers who bought through several channels, recently switched suppliers or grew quickly can find their allocation lower than their need. These terms matter only in a crisis, which is why they are rarely negotiated with care.
Health systems can ask how allocation will be calculated, which purchase history counts, how fast they will be told about disruption, and which substitutions are allowed without penalty. They can split volume across two manufacturers for the most critical products, accepting some loss of volume discount in exchange for a second supply path. Counsel should review these terms, along with any most-favored-customer or exclusivity clauses that would block a second source.
Physical buffers: paying for safety in normal times
The last lever costs money. Holding extra stock of critical items, paying a premium for diversified or domestic supply, or joining purchasing arrangements that commit to new manufacturing capacity all carry costs. With thin operating margins, those costs compete with everything else.
Collaboration spreads the cost. Health systems in one region can agree in advance to share inventory during a shortage, coordinate conservation, or jointly fund buffer stock held by a distributor. Such arrangements need antitrust review, but they turn individual exposure into shared capacity. Shelf life and storage space limit what any one hospital can hold, so pooled stock rotated through normal use is often more practical than a dedicated stockpile.
This lever is where boards come in. A purchasing department is right to chase unit cost. Only leadership can decide to pay more for lower risk on a short list of products. The decision is easier when it is framed against the cost of a shortage: cancelled procedures, overtime spent on workarounds and patient safety events.
With hindsight
Baxter restarted North Cove in stages from November 2024 and said production was back to pre-hurricane levels in early 2025. Allocations rose through the winter, reaching 100 percent for some sodium chloride solutions in January 2025, and the company reported inventory fully restored by May. In August 2025 the FDA declared the national shortage of 0.9 percent sodium chloride IV solutions over, while noting that some other IV fluids remained in short supply. Policy debate about medical supply concentration continued through 2025, increasingly entangled with tariffs and domestic manufacturing, without a single decisive federal fix. For individual systems, conservation proved the fastest and cheapest lever. Contract terms and paid-for buffers moved more slowly, as financial pressure on hospitals grew through 2025.