In an era of urgent societal needs and digital transformations, hospitals are under increasing pressure to adapt while delivering high-quality services amid constraints such as limited funding and workforce shortages. Innovation labs have emerged as spaces to foster bottom-up innovation, but their effectiveness in healthcare remains understudied. Using a case study approach, we explore the mechanisms driving hospital innovation lab strategies and their impact at different levels of the hospital system. Using impact mapping, we provide empirical insights into the role of innovation labs in hospital innovation focusing on the patient experience, the well-being of healthcare professionals, and sustainable hospital management.