This paper presents a proposal for Chile’s health system innovation structure based on a formal service design approach, including management and process architecture definition. Such structure defines how to allocate innovation resources in the health system to increase its efficiency. It uses data envelopment analysis (DEA) to measure hospitals’ efficiency, which also determines the variables that explain such efficiency. Thus, the architecture uses the knowledge about hospitals’ efficiency and their determinants to define innovation projects and assign financial resources for them. It also assures their implementation to increase the efficiency of the hospitals. DEA measurements show great improvement potential since only six of 40 hospitals had an efficiency value of 1.0. Some of the projects with the best improvement potential were implemented with very good results, summarized in the paper. The main contribution of this work is to formalize and enlarge the scope of the structural design of health services to generate improved results for users at a lower cost.