The objective of the study was to examine veterans' perceptions of problems and benefits of outsourcing inpatient care from Veterans Affairs (VA) hospitals to private sector hospitals. Primary data were collected from a cross-section of 42 veterans who were VA users and nonusers using focus groups. Focus group discussion examined reasons patients use VA care, differences between VA and civilian care, positive and negative impacts of outsourcing, and special needs of veterans. Analyses revealed five domains related both to use of VA services and perceptions of outsourcing: costs, access, quality of care, contract (i.e., a covenant between veterans and the U.S. government), veteran milieu, and special needs. Participants identified a variety of potential positive and negative impacts. In general, veterans perceived more advantages than disadvantages to outsourcing VA care but still expressed significant concerns related to outsourcing. These issues should be considered in the development of future policy toward outsourcing VA care to the private sector.