The evolving healthcare landscape demands hospitals to innovate for better patient outcomes and cost management. This paper explores Artificial Intelligence's (AI) transformative potential in enhancing hospital care quality while containing costs. It investigates AI's impact on patient recovery rates, Average Length of Stay (ALOS), and operational expenses, crucial for healthcare institutions' financial sustainability. It begins by outlining hospitals' current challenges in delivering quality care within resource limitations, stressing the need to balance outcomes and costs. Recent AI and machine learning advancements offer solutions to augment healthcare processes. AI applications such as predictive analytics for early patient deterioration detection, personalized treatment recommendations, and administrative task automation are examined. Integration of AI decision support systems improves clinical decision-making and care efficiency. The paper discusses tangible benefits of AI implementation: faster patient recovery, reduced ALOS, and lower operational costs through resource and workflow optimization. AI adoption's long-term implications include decreased costs from preventable complications and readmissions, and improved population health outcomes by managing chronic conditions proactively. In conclusion, the paper advocates for strategic AI integration in hospitals to elevate care quality, reduce costs, and ensure financial sustainability. Harnessing AI's power can position healthcare institutions as innovation leaders, ultimately improving patient outcomes and fostering a resilient healthcare ecosystem.