<p>Moral injury is commonly used to describe the ethical and emotional distress experienced by clinicians who are repeatedly required to act in ways that conflict with their moral commitments within constrained systems. While this concept has helped shift attention away from individual burnout, it has remained largely focused on personal experience. This analysis suggests that moral injury can also arise at the level of health systems themselves. Health systems may produce harm not through neglect, wrongdoing, or failure, but through decisions that are technically correct, rule-compliant, and made in good faith. When such decisions are repeatedly embedded within institutional processes, they can suppress attentiveness to vulnerability, displace moral responsibility, and obscure forms of harm that fall outside formal recognition. Under these conditions, ethical distress becomes patterned and routine rather than exceptional. Drawing on virtue ethics and prior work on mercy in medicine, this paper conceptualizes <i>systemic moral injury</i> as a specific configuration of ethical strain arising from misalignment between the operational logic of health systems and the moral purposes of care. Rather than offering prescriptive solutions, this account develops systemic moral injury as a clarifying concept. It helps explain why ethical discomfort persists among clinicians and patients even in systems that perform well by conventional standards. Recognizing moral injury at the institutional level is essential for ethical clarity, responsible leadership, and the long-term moral sustainability of healthcare systems operating under constraint.</p>