The role of health financing system and pluralism in achieving sustainable development goal health outcomes in India: a multilevel analysis

INTRODUCTION: The health system in India is pluralistic, with different sources of financing and multiple, overlapping financing systems across states. Existing studies often neglect system-specific factors such as fragmented health insurance schemes and state-level financing mechanisms. This study examines how health insurance pluralism, financing systems, and contextual state factors influence SDG health outcomes, integrating both individual and structural dimensions. METHODS: Data from NFHS-5, RBI database (2019-20), and National Health Accounts (2019-2020) were analysed. States were classified by financing systems (public, prepaid, and out-of-pocket) and categorized into low, medium, and high fragmentation groups using a fragmentation index. Multilevel logistic regression accounted for the hierarchical structure of health data, analysing both individual-level characteristics and state-level contextual factors. The descriptive analysis summarized sample characteristics and variable distributions. RESULTS: States demonstrated diverse financing systems, with significant fragmentation in out-of-pocket-dominated systems. Public and pre-paid systems had beneficial effects on child mortality, vaccination rates, and WASH access. While fragmentation occasionally enhanced outcomes, it also increased expenditures. Out-of-pocket expenditures persisted as a key driver of inequity and financial risk. CONCLUSION: Strengthening India's health system requires reducing fragmentation, promoting equitable financing, and aligning policies with the objectives of universal health coverage and the Sustainable Development Goals.