Managing The Oxygen Crisis: Supply Chain, Rationing and Permanent Solutions

Oxygen Express arriving at a station with filled tankers of life-saving oxygen.

Oxygen is the single most important medicine for moderate-severe COVID patients. COVID as well as non-COVID hospitals are facing an acute shortage of medical oxygen. The reason is not a lack of production of oxygen, but the inadequacy of the distribution network of tankers to transport liquid oxygen from the point of manufacture to the hospitals.

Oxygen distribution is a complicated business. The large hospitals are usually supplied directly by oxygen manufacturers such as Inox and IndoGases via tankers. Medium and small hospitals and nursing homes chiefly rely on intermediaries. The manufacturers will supply liquid oxygen to filling stations via tankers. Gas agencies, who own cylinders needed by smaller hospitals and nursing homes, get the cylinders filled from these filling stations and supply them to the nursing homes either via “jumbo cylinders” (gaseous oxygen) or “dura cylinders” (containing liquid oxygen that expands 860 times to gaseous form). At present, this entire supply chain has been disrupted at multiple levels.

Due to sudden increase in requirements, more tankers needed to be pressed into service. Unfortunately, we had only 1200-odd cryogenic oxygen tankers in the entire country, which is very insufficient for servicing the requirements. To solve this problem, some state governments such as the Uttar Pradesh government quickly pressed in tankers used for other liquid gases into service for transporting oxygen and also tagged tankers to get real-time data on their location. Several large corporates such as Reliance, Adani group, Tata companies etc stepped in to divert industrial oxygen from their plants to hospitals across the country. The Central government airlifted several tankers from other countries and has been running Oxygen Express trains to affected areas for rapid transport of liquid oxygen from large industrial plants. The Delhi state government also announced that they would import cryogenic tankers from Bangkok; however, this has not materialized as yet. In a parallel move, the Central government also flew in ready-to-use plants for installation at several sites.

The world chipped in to help, as payback for India selflessly putting other countries’ interests before their own in supplying vaccines.

But the question still remains: why are all these measures being taken AFTER the requirements have shot through the roof? Why was this not thought of earlier?

It turns out that they had indeed thought of this earlier. In the beginning of 2020, the Central government held several rounds of discussions with oxygen manufacturers on augmentation of capacity based on potential requirements. States had also been briefed on the need to set up oxygen plants at major hospitals and funds had been earmarked from PMCARES Fund for this purpose. However, with the first wave suddenly and inexplicably dying down, the urgency of the situation was lost. Most states did not set up the oxygen plants and subsequently landed into extreme difficulty. Only a few states , such as Assam and Uttar Pradesh, set up oxygen plants at major hospitals. Kerala, that had augmented its capacity and claimed to be oxygen surplus, was soon found requesting for additional oxygen allocation when the COVID situation in the state started to deteriorate. The relatively unaffected state of Odisha stepped in to supply 345 tankers of oxygen to severely affected states.

Though some parts of the country, such as Mumbai and other cities of Maharashtra, did face shortage of oxygen during the first wave, by and large this was quickly overcome by diverting oxygen tankers from less affected states to more affected ones, and overall the situation stayed manageable. But during the second wave, several large states across the country showed an explosive increase in the number of cases in a very short time. Due to this, the inadequacy of the distribution network got completely exposed. Manufacturers were unable to deliver oxygen even to large hospitals. Several smaller hospitals ran out of oxygen, sometimes leading to catastrophic consequences. Smaller hospitals often lent each other a few cylinders to keep going for just a few more hours till supplies arrived. Suppliers’ vehicles would often spend several hours waiting in queue for refilling of oxygen cylinders, only to be turned back as stocks were exhausted.

The cost of oxygen rose rapidly to as much as ten times that of the pre-COVID rates. Cylinders quickly disappeared from circulation with fearful people and wicked black-marketeers stocking them up. Small portable cylinders such as those used in mountain sickness, were selling at over Rs.25,000/- each in Delhi – the actual cost being not more than a thousand at best. In some states such as Maharashtra, the government stepped in to fix the price of oxygen per cylinder. This proved completely ineffective as dealers negated this by billing separately for transportation and logistics. The net cost to hospitals remained virtually unchanged. The black market for oxygen cylinders continued to flourish across large parts of North India as hospital beds became scarce and home care was the only option for thousands of patients. Oxygen concentrators quickly flew off the shelves and their selling price shot up from 35000 to 40,0000 rupees pre-COVID to over a lakh in April – May 2021.

As the situation turned dire, the central and state governments turned to oxygen rationing. Oxygen rationing is not a new concept or an Indian solution. Hospitals in the US and UK resorted to implicit or explicit rationing of medical services including oxygen during the peak of the pandemic in their respective countries. But the manner in which this rationing is done is different in each country. In India, the Central government collected data on oxygen beds and ICU beds from all COVID hospitals in each state and then allocated a certain quantity of oxygen to the state that was deemed necessary for treatment per patient. For example, 5 lit/min was allocated for an oxygen bed and 20-24 lit/min for an ICU bed. In turn, each state allocated a quota to each district, and each district to the hospitals under their jurisdiction. HFNC (High-Flow Nasal Cannula) is a commonly used treatment modality for COVID patients that pushes in a high flow of oxygen at upto 100 lit/min to severely ill patients. It is known to reduce the need for ventilatory support by over 50%. The use of HFNC was virtually outlawed as unnecessary wastage of oxygen.

Several other measures have also been introduced. Hospitals have been directed to appoint a nurse whose sole responsibility will be to monitor and control oxygen wastage sources, ranging from leaking oxygen lines to patients not turning off their oxygen on visits to the washroom. Another person must be appointed to brief the collector’s office on daily requirements and supplies. The control rooms set up in Maharashtra have been doing a good job of ensuring that the supply chain is maintained, even though the cost of oxygen for the hospitals is extremely high. Municipal officials, and occasionally top officials such as the collector of the district, take rounds in COVID hospitals and point out ways in which oxygen “wastage” can be curbed. At some places, this has gone to extremes, with officials turning off some patients’ oxygen supply and reprimanding treating teams for wasting oxygen if the patient’s oxygen saturation does not fall without it. These are not made-up stories. It is actually happening.

Though on the face of it, these policies will ensure equitable distribution of a presently valuable resource, it is almost certain to be counter-productive because of some basic facts:

  1. Patients’ requirements are not static. They may change from minute to minute and from 2 lit/min to 15 lit/min within a matter of hours. It takes much longer for requirements to fall than it takes for them to rise, and hence averaging of requirements may not work well.
  2. ICU requirements of oxygen are much higher than 20 lit/min. As the major treatment modality in COVID is non-invasive ventilation (NIV) or BIPAP, the average consumption is 30-40 lit/min.
  3. Many unscrupulous vendors under-fill the oxygen cylinders, sometimes intentionally, on others due to lapses in the filling process. Hence there is no guarantee that the allotted quota actually contains the claimed amount of oxygen.
  4. If supply of oxygen is going to be fixed at a certain level with no possibility for compensation if a patient with higher requirements were to need treatment, it is almost inevitable that hospitals would try to accommodate only those patients it can manage within that allotted quota, and avoid those who have higher requirements. This directly translates into less severe patients getting adequate treatment in hospital and more severe ones left without hospital beds.

Thus, “oxygen rationing”, as it is practised in India, ensures that hospitals get at least some regular supply of oxygen. But it indirectly discourages hospitals from taking up more critically ill patients with highest requirements of an ICU bed, for fear of being unable to treat other patients properly due to limited supplies of oxygen. This will eventually cascade into higher mortality due to patients in greatest need of treatment going virtually untreated. Oxygen rationing, though unavoidable in many respects under the present situation, is far from an ideal solution. If the requirements are to be calculated, they should be on the basis of maximum and not minimum consumption. For example, instead of telling hospitals not to use HFNC, the requirement needs to be factored in during calculations for procurement.

At a state level, oxygen has also led to allegations and counter-allegations of deprivation and favoritism due to political expedience. A small city-state such as Delhi demanded an oxygen quota equal to several much larger and densely populated states and cried foul when an oxygen audit to verify consumption was asked for by the Central government. Some states seized oxygen tankers meant for other states and diverted them to their own hospitals, leading to conflicts between states. Oxygen tankers have now been given security and escorts to ensure that they reach their destination quickly without disruption.

So what should be done? Several things can be done, and in fact are being done. Many states have finally prioritized building oxygen plants within government hospitals. Maharashtra Health Minister Rajesh Tope declared that it would be made mandatory for all private hospitals to have in-house oxygen plants. Transport capacities for oxygen have been augmented across the country. Some oxygen plants that were lying in disuse have been recommissioned and restarted. Several raids have been conducted on black marketeers and huge numbers of cylinders and oxygen concentrators have been recovered. The requirements in some parts of the country will start falling shortly due to drop in number of fresh cases and some diversion of oxygen from less affected to more severely affected areas will become possible again.

But execution of permanent solutions such as oxygen plants and procuring adequate number of cryogenic tankers too need to be completed in a very short time. We have only about three months before the pandemic monster rises again to threaten the country with a third wave. Fortunately, there are reasonably good solutions now available for this that need not be extremely expensive or time-consuming to build. The problem, for the vast majority of small nursing homes and medium hospitals, is the capital investment needed to build them. For this, the government needs to step in with grants or soft loans to small nursing homes and mid-sized hospitals to make it possible for them to set up small oxygen concentration plants in-house. After all, maintaining the supply chains is the responsibility of the government. The state’s failure to do so cannot be made a reason for penalizing the hospitals worst affected by these disruptions.

Medical oxygen has not been an issue in India before this pandemic. Supplies have by and large been regular. The need for hospitals to generate their own oxygen has indeed been felt now. However, we may end up with a large surplus well beyond needs once the pandemic dies down. This isn’t really a wastage. Large manufacturers can step up supplies to industries instead of hospitals. Hospitals will save significantly on costs over the long run. The additional capacity will ensure that we do not run out of oxygen again in the face of a subsequent epidemic, and eliminate dependence on transporters and filling stations. In many ways, this fits well with the present central government’s determination to eliminate middlemen. However, it should not end up becoming an albatross around the necks of hospitals. Some financial support will be needed to soften the cost implications for hospitals in the short term.

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