In principle I believe it may be a good idea, and from what I can tell at least two separate bills with similar ideas have already passed major hurdles and are waiting to be reconciled with one another before approval.
In practice I think this may be an unmitigated disaster in the short term. My concern arises from doubts about whether or not there is enough slack in the rest of the US healthcare system to soak up the sudden influx of veterans (9 million people annually,
"57,000 veteran patients have been waiting at least 90 days for their first VA medical appointment, and an additional 64,000 veterans appear to have been denied appointments after requesting them.").
I do not think that this in itself is a solution unless it means injecting more money into the system, although perhaps you can get some of that extra money from firing the administrators
the VA has long had the authority and ability (in theory) to offer healthcare outside of the VA system, but have obviously not used that power to a sufficiently great extent. When you have a situation like that I think it may be fair to ask what it is that makes them so unwilling to do so. In addition to cultural problems, malice and repeated head-injuries among administrators, I think it may be a signal that the system is chronically underfunded and the administrators are therefore "discouraged" from referring veterans to any facility or specialist outside the VA system.
If that is the case, then I don't think this alone will solve the problem. Instead it may shaft everyone else. If that is
not the case, and the VA is both adequately funded and administrators not discouraged, then maybe you can begin by making sure that the referral system works better and is actually used. If the administrators are the problem, then you can place more authority in the hands of the doctors who are better equipped to decide which patients would be better served by coming to the VA facilities and which ones could just as easily go to any other facility.
I don't doubt that the majority of medical issues regarding veterans can in general be handled outside the VA system but I don't think it's a good idea to dismiss the the added value of the psychological and social insights an experienced VA doctor may have into the situation of many veterans. That experience is of course useless if the patients never even get to see their doctors, but...