Healthcare, as any other service operation, requires systematic innovation efforts to remain competitive, cost efficient and up to date. In this paper, we outline a methodology and present how principles of two improvement programs, i.e., Lean Thinking and Six Sigma, can be combined to provide an effective framework for producing systematic innovation efforts in healthcare. The benefits of this approach are that healthcare cost increases can be kept in control, while quality is improved, and better healthcare is provided. The approach is illustrated by a longitudinal case study of a period of five years in a hospital.