Health care policy makers internationally are increasingly expressing commitment to consultation with, and incorporation of, the views of the general public into the formulation of health policy and the process of setting health care priorities. In practice, however, there are relatively few opportunities for the general public to be involved in health care decision-making. In making resource allocation decisions, funders, tasked with managing scarce health care resources, are often faced with difficult decisions in balancing efficiency with equity considerations. A mixed methods (qualitative and quantitative) approach incorporating focus group discussions and a ranking exercise was utilised to develop a comprehensive list of potential criteria for setting priorities in health care formulated from the perspective of members of the general public in Australia. A strong level of congruence was found in terms of the rankings of the key criteria with the size of the health gain, clinical effectiveness, and the ability to provide quality of life improvements identified consistently as the three most important criteria for prioritising the funding of an intervention. Findings from this study will be incorporated into a novel DCE framework to explore how decision makers and members of the general public prioritize and trade off different types of health gain and to quantify the weights attached to specific efficiency and equity criteria in the priority setting process.