Experiential learning, which may include hands-on learning paired with observation and reflection, has been applied in several industries; however, the impact of experiential learning in design education is not well known. We investigated how the type of simulation-based learning could affect the acquisition of knowledge and the ability to synthesize that understanding into insights for medical design innovation. One workshop included observational learning and the other experiential learning with hands-on training. Each course included 14-16 multidisciplinary undergraduate and graduate students. During both workshops, we measured student comprehension of two procedures--infant resuscitation and management of maternal hemorrhage. We focused on the first two phases of design thinking: "Understanding" and "Defining the Problems". Although the course focused on "medical device design", we encouraged students to look beyond the tool to imagine how their design change could impact the entire system. We did not find a significant difference between the scores given to students in the two courses by industry experts. Although the quality of the ideas and execution were similar between both workshops, the instructors noticed that the integration of hands-on training into the second workshop created a higher level of excitement in the class. The methodology and the approach adopted may be relevant to many design problems. In order to better understand the impact of observational learning versus hands-on training, both workshops could be expanded into full quarter classes that allow students to expand their design thinking skills to prototype and test their ideas in the real world.