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I mean, I didn't say anything about making money. Public institutions will face the same pressures in the face of rising wages outside the healthcare sector. Hospitals are filled with old people, who are sometimes racist assholes, who need their bedpans cleaned. And whoever needs to do that cleaning needs to get paid a competitive wage. And so if a public institution isn't allocated additional funds to compensate for increased wages (and bureaucracies and legislatures hate increasing funds) they will need to find a way to save money.
Also, a very large portion of people in hospitals will never work again, as they are the elderly. Of course, we should care for these people - but just saying that if you try to take an economic prodictivity tack with your argument, you will run into this problem