Of 25 million U.S. veterans, 21% used Veterans Affairs (VA) services in the past year, and 2.7% used VA mental health or substance abuse (MH/SA) services. Although all veterans are now eligible for VA services, those most likely to use VA services receive VA income benefits are older, poorer, and less likely to have health insurance.

In 2003, 1.2 million veterans received a MH/SA diagnosis in VA, about 25% of all VA users. While they were a diagnostically mixed, Global Assessment of Functioning scores averaged 53, suggesting poor functioning, and 19% were dually diagnosed. VA is a cabinet-level agency with many important stakeholders. Concern about war-related Post Traumatic Stress Disorder (PTSD) and homelessness among veterans have given mental health issues greater prominence in the VA community in recent years. In 1995, a major reform was initiated which closed most MH/SA inpatient beds, nearly doubled outpatients treated, and emphasized accountability and performance measurement.

There has been great interest recently in smoothing the transition from DoD to VA, although the integration of information systems has yet to take place. Most VA patients get all of their MH/SA and medical services from VA. Although there has been concern that with extensive recent bed closures, VA patients would be forced to seek care in other health systems and might experience an increased risk of incarceration or suicide, empirical studies conducted thus far have not shown a significant increase in these problems.

During the past 20 years there have been two notable phases in the development of VA MH/SA services. The first was initiated by the leader of mental health programs in VA central office from 1985–1994 and involved expansion of specialized mental health programs such as Assertive Community Treatment, homeless