Staff File Photo The entrance to the emergency room at Erlanger hospital is seen in this file photo.

Let's try wrapping our heads around what we're told was an unsolicited private hospital company's offer to buy Erlanger for $475 million dollars.

Except — no, that $475 million wasn't really the offer, if we read Monday's story in the Chattanooga Times Free Press with an eye for detail.

StoneBridge Healthcare, a Pennsylvania-based company that "helps health care organizations navigate financial challenges," according to that report, "would write Hamilton County a check for $200 million and put the remaining $275 million toward capital." Also, as part of the deal, Erlanger would fund its remaining pension liability, according to StoneBridge CEO Joshua Nemzoff, who told the Times Free Press that "Hamilton County would end up with around $70 to $100 million left over from the deal."

So the reality is that StoneBridge has offered, at best, $100 million.

Just hold it right there.

This is our region's only academic medical center, level 1 trauma center and children's hospital.

The Times Free Press story noted that "While that may not seem like enough for a more than $1 billion revenue health system," Scott Phillips, managing director at the consulting firm Healthcare Management Partners, said "he wouldn't consider StoneBridge's offer a 'lowball' based on industry standards. That's because Erlanger's profitability is low, and he said the offer is according to what the health system is worth now, not what it could be worth."

In recent years, Erlanger had its most profitable year in 2016, when the public health system made a 3.7% operating margin, according to the HMP Metrics database managed by Phillips' consulting firm. In 2017, Erlanger's operating margin fell to 0.9%. In 2018, it shrank to 0.1%. In 2019, Erlanger ended the fiscal year with a $4.4 million, 1.3% operating loss.

READ MORE: Private suitor met with Hamilton County mayor, former Sen. Corker before offer on Erlanger hospital

By comparison, Erlanger's competitors Parkridge, CHI Memorial and Tennova Healthcare-Cleveland made 23.7%, 6.8% and 6.7% operating profit margins, respectively, in 2019.

Now comes 2020, and though current Erlanger financial reports are not yet public, COVID-19 has dealt a devastating blow to the hospital industry as a whole — particularly public and safety-net hospitals such as Erlanger that operate on thin margins and provide high levels of uncompensated health care.

So in strolls one of the most sophisticated mergers and acquisition groups in the health care business with an offer to write a check of $200 million that would net the county maybe $100 million — barely over a tenth of the cash needed to pay for the new Hamilton schools facility plan which has price tag of $891 million.

If the county and the Erlanger board of trustees were to bite at that, the buyers would be stealing our hospital.

Hamilton County Mayor Jim Coppinger, along with the board, said thanks, but no thanks, Erlanger's not for sale. As did state Sen. Todd Gardenhire.

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Staff file photo by Robin Rudd / Erlanger Children's Hospital was one of 120 hospitals in the nation to receive top honors from the independent Leapfrog Group. The Hospital's new Children's Kennedy Outpatient Center at Erlanger Hospital was photographed on December 19, 2019.

Nemzoff says StoneBridge will wait and see what happens.

"Everybody is going to see exactly what their financial position is, and then everybody will be able to make their own decision as to whether this is a distressed hospital," he said. "We're not going anywhere."

If you think that sounds like someone offering to "take up" the last two payments to buy your 5-year-old car, you'd be about right.

Paul Keckley, a health care policy analyst and managing editor of The Keckley Report, an industry publication, said the rationale for buying troubled hospitals is that the acquiring entity believes it can manage it better by reducing operating costs, finding new revenue sources and growing market share. That usually involves buying cheap, cutting costs, getting a management fee, and then selling the hospital in about five to six years so that investors get all their money back plus some, he said.

That usually starts with lost jobs, since most operating costs — about 60% — in a hospital are labor, followed by direct costs for supplies and technology.

"Does glass get shattered along the way? Do commitments made by the board or management prior to the deal, do those go away, or do they get changed? And do certain clinical programs get shrunk or disappear? Yeah," Keckley said.

READ MORE: Private company offers $475 million to buy Erlanger from Hamilton County

And Phillips told the Times Free Press: "Erlanger has historically underperformed, and it's historically been under-managed, if you will. Its lack of profitability and its profit margins are well below those of comparable hospitals positioned in other markets."

But don't be fooled. In this case, underperformance, like beauty, is in the eye of the beholder. Erlanger is a public hospital. It's not a for-profit hospital. Private firms are bound to stockholders, not community stakeholders — the people in our region with no or inadequate insurance and no ability to pay for care.

Phillips speaks in language far more corporate: "Erlanger has enjoyed fairly robust top-line growth, but hasn't enjoyed corresponding growth in profitability."

Erlanger doesn't send profits to a group of investors, stockholders or out-of-town owners. As a public hospital, Erlanger sends profits in the form of care to all of us and the members of our families and community.

And that, folks, is a profit for us.

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Staff file photo by Doug Strickland / T.J. Bass climbs out of a Lifeforce helicopter during a backboard-immobilization workshop hosted by Erlanger Hospital at Signal Mountain Middle High School in 2018. Athletic trainers with area high schools got hands-on training on how to properly move an injured athlete.