Little is known about the quality of care that veterans obtain in the private sector. To explore this issue, we identified the hospital in which 4,008 veterans enrolled in the Veterans Administration (VA) obtained coronary artery bypass graft (CABG) surgery in the New York private sector between 1997 and 2000. We used published risk-adjusted mortality rates to assign New York CABG centers to performance quintiles. VA patients with the lowest incomes were 2.4 times more likely than those in the highest incomes to use the highest-mortality hospitals (95 percent CI: 2.0-3.0). Compared with white patients, black (OR 1.8; 95 percent CI: 1.2-2.8) and Hispanic VA patients (OR 1.6; 95 percent CI: 0.9-2.8) were more likely to use the highest-mortality hospitals. About one third of patients using the highest-mortality hospitals lived closer to low-mortality hospitals. Efforts to direct VA patients' care to high-performance hospitals could improve outcomes and reduce racial and ethnic disparities in care.