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Just as in other modern industries, the term ‘innovation’ in healthcare has become associated with new developments in the field that allow for improvements in solving problems, in this instance, healthcare problems. This paper seeks to clarify what the term truly means. To address this issue, we first define innovation as a general term, then define what innovation means in the context of the healthcare industry. To better understand what may be considered ‘innovative’ in healthcare, we suggest criteria for innovation and identify potential challenges to newly introduced innovations in the field.