Since last decade, Healthcare has been acknowledged as the most crucial service sector and even is reaching out remote areas to serve the needy and sick patients. Diagnostics Laboratories are the basic functional departments in hospitals meant to investigate on samples of patients and report about diseases that may be present. Available literature review reveals research being done in pathological aspects, disease management, procedures for biopsy, report formats etc. It is observed that not much of research has been done in the operational aspects of Diagnostics service. It is the need of the hour to lay emphasis on improving these processes. Hospitals and Diagnostics centres with well-defined processes would entail in increased level of customer satisfaction. Awareness of people about patients rights, safety is demanding delivery of service with quality. Hence the aspect of Process improvement needs deeper insight. Hospitals and Diagnostics Laboratories need to integrate people, process and productivity. The current study consolidates the findings in the literature from two perspectives: (i) evolution of healthcare and medical diagnostics (ii) process improvement in medical diagnostics. This study gives the direction for further research in improvisation of process aspects in healthcare in general and medical diagnostics in particular.