Well damn, I had no idea.
When your party member is calling for the band-aids, open the Inventory and
make sure you highlight the wounded character. The just right-click anyone's stock of potions or food and consume. It will be the highlighted character that benefits.
I should note that a large portion of my healing potions in the early play-throughs were being drunk by healthy characters because I had the wrong character highlighted. Just one of those issues with a CRPG as opposed to PnP!
