Abstract Health equity constitutes the absence of remediable, systematic disparities in health status and healthcare access between socially, economically, or geographically stratified populations. Despite universal health policy commitments, health systems frequently conflate equal resource allocation with equitable distribution, perpetuating baseline disparities. This study evaluates the mechanisms through which social determinants of health (SDOH) drive health disparities and investigates the mediating role of ethical frameworks—specifically distributive justice and the capabilities approach—in health system performance. Utilizing a systematic documentary and comparative policy analysis methodology across 48 institutional health frameworks, this study synthesizes structural determinants, quantitative disparity metrics, and governance models. Findings demonstrate that needs-adjusted resource allocation and intersectoral "Health in All Policies" governance account for significant reductions in avoidable disease burden across vulnerable cohorts, whereas uniform equality-based distribution exacerbates disparity gaps. Achieving sustainable equity requires health systems to move beyond downstream clinical interventions toward institutionalized, needs-weighted financing, entrepreneurial transformation models, and granular disparity monitoring. Keywords: Health Equity, Health Equality, Social Determinants of Health, Distributive Justice, Health Systems Financing, Resource Allocation, Allocative Optimality