Edward J. Derwinski, a folksy Illinois Republican who served 12 terms in the U.S. House of Representatives and was the first secretary of the Department of Veterans Affairs, which became a Cabinet-level agency under President George H.W. Bush, died Jan. 15 at a health care facility in Oak Brook, Ill. He was 85.

He had Merkel cell carcinoma, a rare form of skin cancer, said his wife, Bonnie Derwinski.

During his quarter-century in Congress, Mr. Derwinski developed a following on Capitol Hill for his blunt-spoken demeanor and wardrobe of garishly colored sport coats. “I’m more comfortable at the [Veterans of Foreign Wars] in Joliet than at the Cosmos Club in Washington,” he once said.

He also reveled in his family’s Polish heritage. When John Paul II became the first pope to visit the White House in 1979, Mr. Derwinski, Sen. Edmund Muskie (D-Maine.) and Rep. Clement J. Zablocki (D-Wis.) greeted the pontiff on the South Lawn by singing the traditional Polish folk song “Sto Lat,” which means “live a hundred years.”

In the House, Mr. Derwinski represented a Republican enclave in southwestern corner of Cook County in the Chicago suburbs. He served as the ranking Republican on the House post office and civil service committee and as the second-ranking member of the House foreign affairs committee.

He lost his seat in the House to redistricting after the 1980 Census and was defeated in a primary bid for reelection in 1982. “My throat was slit by the mapmakers,” he said.

He soon landed a job at the State Department, where he negotiated a salmon fishing treaty with Canada and ran Operation Staunch, a mission to stop arms sales to Iran. He also served as the government’s liaison to the U.S. Olympics in Los Angeles in 1984 and the 1987 Pan American games in Indianapolis. He helped arrange visas for athletes, including members of the Cuban national team.

In 1989, Bush nominated Mr. Derwinski to lead the new Department of Veterans Affairs. Bush said Mr. Derwinski possessed the “skill of a seasoned legislator, the patience of a practical administrator, the finesse of a diplomat and the heart of a man who knows what it means to start his government career as a private in the U.S. Army.”

Mr. Derwinski’s first task was daunting: revamping the beleaguered Veterans Administration into a Cabinet-level operation serving more than 27 million veterans and their dependents. He had 245,000 employees, a budget exceeding $25 billion and control over one of the largest health-care systems in the nation.

One of Mr. Derwinski’s first decisions involved Vietnam veterans seeking disability benefits for exposure to the defoliant Agent Orange. For many years, the VA did not provide benefits to veterans who said the herbicide was toxic.

Siding with the veterans, Mr. Derwinski reversed the government’s position and authorized payments to some veterans who had suffered from a rare form of cancer linked to Agent Orange.

To survey the quality of care at hospitals, Mr. Derwinski made surprise visits and spoke to patients about their treatment. If Mr. Derwinski found inadequacies, he fired administrators in charge. He ordered outside consultants to review surgical protocols at the hospitals after several veterans died from complications related to poor care.

To alleviate the problems, Mr. Derwinski won annual funding increases of about $1 billion to rehabilitate the hospital system.

Some of Mr. Derwinski’s reforms were not as well-received among veterans’ organizations. He enraged many veterans by banning smoking at all Veterans Affairs facilities and prohibited the sale of cigarettes at hospitals.

With support from health organizations, Mr. Derwinksi also proposed opening certain VA hospitals in rural areas to poor non-veteran patients who had no access to nearby medical facilities. The Veterans of Foreign Wars, among others, portrayed the pilot program as an affront to their benefits.

In 1992, an election year, Mr. Derwinski resigned from his post after concern was raised among White House and campaign aides that the president would not receive an endorsement from the Veterans of Foreign Wars if the secretary stayed on. The VFW remained neutral in the election. Bush lost the presidency over many issues, including the raising of taxes.

“The VA was in a rut, a well-intended rut they’d been in for a couple of generations,” Mr. Derwinski told The Washington Post in 1992. “I tried to shake ’em a little, and I should have done it a little more vigorously than I did.”

Edward Joseph Derwinski was born in Chicago on Sept. 15, 1926. After Army service in the Pacific during World War II and then in post-war Japan, he attended night classes at Loyola University and graduated in 1951.

Mr. Derwinski took over his father’s savings and loan business in the 1950s and served as president of the company until 1975. He was elected to the U.S. House in 1958.

His first marriage, to Pat Van Der Giessen, ended in divorce.

Survivors include his wife of 25 years, Bonnie Margalus Hickey Derwinski of Chicago; two children from his first marriage, Michael Derwinski of Annandale and Maureen Quattrocki of Falls Church; two stepchildren, Maggie Hickey and Kevin Hickey, both of Chicago; a sister; and seven grandchildren.