Over the last few decades, our digitally expanding world has experienced another significant digitalization boost because of the COVID-19 pandemic. Digital transformations are changing every aspect of this world. New technological innovations are springing up continuously, attracting increasing attention and investments. Digital twin, one of the highest trending technologies of recent years, is now joining forces with the healthcare sector, which has been under the spotlight since the outbreak of COVID-19. This paper sets out to promote a better understanding of digital twin technology, clarify some common misconceptions, and review the current trajectory of digital twin applications in healthcare. Furthermore, the functionalities of the digital twin in different life stages are summarized in the context of a digital twin model in healthcare. Following the Internet of Things as a service concept and digital twining as a service model supporting Industry 4.0, we propose a paradigm of digital twinning everything as a healthcare service, and different groups of physical entities are also clarified for clear reference of digital twin architecture in healthcare. This research discusses the value of digital twin technology in healthcare, as well as current challenges and insights for future research.