How do the hospital medical machines measure your oxygen saturation just by having the little clip thing on your finger?

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I’m currently in hospital and was in the ICU yesterday and just thought about this late last night when I couldn’t sleep, because of being hooked up to the machines and all of the constant beeping.

I understand how they can measure your heartbeat, temperature, etc. with that, but was kind of confused on the oxygen saturation?

Does it check the skin coloration? I. E. how people with really low saturation can get blue fingertips?

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