Sprawling DHS needs more than a leadership change

Every crisis has in it the seeds of opportunity. So it is with the state's massive Department of Human Services, thrown into disarray earlier this month when its top two deputy commissioners abruptly resigned, signaling serious conflicts within. In quick succession, Commissioner Tony Lourey stepped down, followed by his chief of staff, Stacie Weeks. The two deputies then opted to stay on.

The easy route would be to swap out leadership and call it done. Fortunately, that's not Gov. Tim Walz's plan. With the appointment of Pam Wheelock, a well-respected veteran player in state government, as acting commissioner, Walz wants a top-to-bottom analysis of an agency that many have long suspected has become too large and complex to also be efficient and accountable.

"People have wondered whether the structure is too big, too unruly, too unfocused," Walz said in an interview with an editorial writer. "I think they're correct. It is." Walz noted that Republican Sen. Michelle Benson who leads the health and human services budget division, has said DHS is too big and in need of restructuring, then added, "I don't disagree with her."

Benson is not the first to make that critique. In 2015, then-Democratic House Minority Leader Paul Thissen, now a Minnesota Supreme Court justice, proposed a bill that would have broken DHS into five agencies, each with a distinct mission, using existing staff and resources. The idea failed to gain much traction at the time, but it deserves a second, more serious look.

The agency's mission is so sprawling, it's hard to see how so many disparate responsibilities were gathered under one umbrella. DHS is responsible for nursing homes, assisted living, care of the disabled, mental health services, addiction programs, foster care, adoption assistance, the state's controversial Sex Offender Program, food stamps, welfare services, MinnesotaCare, Medicaid and more. Its very size and complexity mean that only a select few in state government have a real working knowledge of how all the pieces come together. That makes it difficult for a part-time legislator to effectively challenge agency practices or conduct strong oversight. Challenges exist even for someone as skilled as Legislative Auditor Jim Nobles, who earlier this year found "pervasive fraud" among operators in the state child care program.

"We audit DHS constantly," Nobles told an editorial writer. "It's that big, that complicated. But I've got three or four auditors, not an army." He's found problems over the years and recommended changes — some followed, some not.

Walz said he intends to get a wholesale re-examination underway with Wheelock, whom he expects to stabilize, analyze and clean up the agency and clear the path for a permanent commissioner. That will be aided by the pathways opened among the top Democratic and Republican leaders that, despite the tensions of the session, remain in place. Such cooperation will be necessary to craft a bipartisan approach to an agency that, at $17 billion annually, consumes an estimated 40% of state government.

Senate Majority Leader Paul Gazelka told an editorial writer that while a leadership change was needed, "I don't want us to lose sight of the need for reforms. The governor is leaning in with us on forming a blue-ribbon panel with outside experts. That's what brought transformation to the MNLARS program. I'm not afraid to look at doing things differently at DHS, even dividing it up."

There is another aspect to this shake-up that remains troubling. Lourey's departure — and his refusal to discuss it — caused needless speculation about underlying causes. Walz said the issue lies in differing management objectives that became sharper with the resignations of Deputy Commissioners Chuck Johnson and Claire Wilson. For all his expertise in health care, Walz said, Lourey was not suited to the large-scale revisioning needed.

"I'm not looking for someone who can run a hospital," he said. "I'm looking for someone who has big vision of implementation of organizational change in the human services realm." He had hoped Lourey was that person. "I'm grateful that he came to me and said he was not." Among the issues: Lourey had installed a chief of staff — unusual at the commisioner-level — who functioned as a gatekeeper in an already massively complex organization and proved untenable.

Walz said he is troubled that two valued top administrators felt they had no way to signal their concerns except through resignation. "That's on me," he said. A good chain of command, Walz said, includes alternative paths.

Just seven months into his term, Walz said there may be structural changes in other agencies. A government structure from 20 or 30 years ago, he said, can be improved.

"We're looking at making government more receptive, more responsive," he said. "You'll see some growing pains."