I work ED, so my mindset is focused on "fix it now" rather than long-term consequences. For example, if a COPD patient comes in with a SpO2 of 85% and is in respiratory distress, I give O2 right away - I don't think about "what if I take away their respiratory drive" because if they are in distress, then they won't be functioning for very long.
Now, with that said, most healthy people should have a pulse ox >90%. If someone has a low pulse-ox but is not in distress, I check the fingers: are they cold? I also check the waveform on the monitor and might hook them up to the cardiac monitor to see if the monitor HR correlates with the pulse ox HR.
If someone is dyspnic, I give O2. If a patient has asthma, faint wheezing, and an Sp02 of 98%, I might throw them on 2-4L O2 via NC until RT arrives (some asthmatics maintain high Sp02 because they are working hard to breathe - and then they poop out after they fatigue from breathing so hard). If someone is in respiratory distress, I bump up the oxygen and may get a mask or non-rebreather.
You have to think about Sp02 as a tool, but also assess the whole situation. For example, what should you do if you have a patient with an Sp02 of 100% but they also have a hemoglobin of 5? You have to think about how hgb carries the O2, and if someone has a hgb deficit, then the patient could also have an oxygen deficit. Same thing with sickle-cell patients who are having a crisis - they may not be oxygenating normally, and oxygen will benefit them and help prevent further sickling.
Here's my philosophy:
To make a long story short: healthy patient, no respiratory problems: Sp02 >90%. No oxygen unless symptomatic.
Hgb <7 or sickle cell crisis: 2-4 L NC, regardless of SpO2 reading.
Hx of COPD, emphysema: if on home O2, apply same setting. Notify MD if unable to maintain baseline pulse ox after repositioning and coughing/deep breathing. If in respiratory distress, bump up oxygen and notify MD stat (you can always knock it down a notch - 5 minutes of extra oxygen won't kill them).
New onset crackles/wheeze + fever: 2-4 L O2 if SpO2 <95%
Confusion, disoriented (esp. if pt has unknown history of confusion): 2-4 L oxygen, assess if improvement in mental status (this is one of many things, such as blood sugar assessment and CT, but we won't go that route...)
Drug overdose, post-ictal, or potential for mental status changes (ie high doses of morphine): 2-4 L oxygen
Look at the patient - are they tri-poding? Retractions in ribs, neck? Cyanotic nailbed? Increased RR? SOB? Unable to speak in full sentences?
If a pulse ox drops during a shift and the patient is resting, I sit them upright and ask them to take some deep breaths in; that will usually bring up their oxygen. Notify a doc ASAP if a patient has sudden respiratory changes. Also notify MD if pt has hx of respiratory illness and is being treated for a recent acute attack (ie COPD exaccerbation), and suddenly the pt is appearing very tired following a period of respiratory difficulties. This is a sign that they are ready to exhaust themselves and will need respiratory assistance soon (BiPap, ET tube).
Hopefully I covered the bases!