As the United States moves from an industrial society to a post-industrial society, fewer people are engaged in the production of goods, and a majority now produce services. The processes of designing and producing goods and services are radically different. This differences calls for innovation in both the structure of the work setting and the policies which govern work in the society as a whole. The article examines differences between goods and services and proposes a new model for designing and producing services, as well as new principles for social policy for service production. The model and principles are illustrated with examples in health care.