The Hospital Ending was an alternate version of the "Sacrifice Chloe" ending planned for the original Life is Strange, in which Chloe Price would have fallen into a coma instead of being killed. The scene would have shown Max Caulfield waking up in the hospital next to Chloe's hospital bed instead of attending Chloe's funeral.
- “It wasn't a third ending. It was when we were in the writing process, when you make the choice of sacrificing Chloe to save Arcadia Bay, we were hesitating between really killing Chloe like we did and maybe leaving her in a coma to offer hope that she could still be alive. But ultimately, when we were writing, we thought that it wasn't a good decision to go this way, because it would reduce the impact of your choice. So if you’re making the choice of sacrificing Chloe, we shouldn't make a cop-out and we should go all the way to really offer an end.”
(To be continued)
With the mentioning of a location called "Hospital - Ending" in the game files since Episode 1, it was speculated whether DONTNOD Entertainment originally intended to provide a third ending where Max ended up in the hospital - probably shot by Nathan Prescott after intervening in his and Chloe's confrontation in the bathroom at Blackwell Academy, and so preventing both Arcadia Bay's destruction and Chloe's death. This possible outcome inspired a lot of fan fictions. DONTNOD debunked the speculation, stating it was actually supposed to be a scene after Max was rescued from the Dark Room.
The Hospital Room scene in Episode 4 was originally created for this alternate Sacrifice Chloe ending, which is evident by a concept art done in an early stage of development (see above). Furthermore, Kate Marsh's appearance in the hospital wasn't originally planned either; it was only added because the players liked Kate so much. In addition to that, it's also possible that the funeral scene in the Sacrifice Chloe ending was originally intended as Kate's funeral but then got scrapped because they didn't want two funeral scenes in the game.
- LiS co-director discusses the game's endings, production, and answers Chatty questions (Shacknews, January 22, 2016)