OBJECTIVES: To examine funding priorities assigned by health ministry officials when choosing between clinical programs that offer similar overall benefits distributed in different ways (e.g. large gains for a few versus small gains for many), and to compare the relative magnitude of any distributional bias to age biases. METHODS: A survey consisting of paired hypothetical health care programs was mailed to the 135 most senior officials of the Health Ministry in Ontario, Canada (population 11.5 million). Respondents were asked to assume they were members of a panel allocating a fixed sum of money to one of two programs in each pair. All program descriptions included the number of persons affected each year by a given disease and the average survival gains from the hypothetical programs. Some scenarios also mentioned the side-effects associated with programs and/or the average age of the beneficiaries. RESULTS: Four respondents had retired/died. Of 131 eligible respondents, 80/131 (61%) provided usable responses. Asked to choose between providing large benefits to a few citizens and small benefits to a great many, 23% (95% CI: 14%, 33%) of respondents were unable to decide, but 55.8% (95% CI: 47%, 70%) favored providing large benefits to fewer patients. Eliminating the 23% unable to decide, 47/62 or 76% (CI 63%, 86% expressed a distributional preference. With a smaller distributional discrepancy, indecision increased, with 35% of respondents having no preference and the remainder split almost evenly between the two programs. Other scenarios showed that health officials' pro-youth biases were only slightly larger than their distributional preferences and that distributional preferences were magnified when combined with minor differences in average ages of beneficiaries. CONCLUSIONS: A substantial minority of health care decision-makers had difficulty choosing between programs with similar overall gains and distributional differences--a result consistent with the utilitarian assumptions of cost-effectiveness analysis. However, when distributional differences were large, decision-makers clearly favored large gains for a few beneficiaries rather than small gains for many. Policy analysts should explicitly weigh distributional issues along with aggregate health gains when addressing resources allocation problems.