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As reimbursement transitions from a volume-based to a value-based system, innovation in health care delivery will be needed. The process of innovation begins with framing the problem that needs to be solved along with the strategic vision that has to be achieved. Similar to scientific testing, a hypothesis is generated for a new solution to a problem. Innovation requires conducting a disciplined form of experimentation and then learning from the process. This manuscript will discuss the different types of innovation, and the key steps necessary for successful innovation in the health care field.