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Lansing — Groups interested in social services were split Tuesday after Gov. Rick Snyder announced he plans to combine two huge state departments with a combined total of nearly 14,000 employees and budgets totaling more than $21 billion.

Under the executive order, the departments of Community Health and Human Services will become the Department of Health and Human Services, making it the state's largest agency, Snyder said.

His merger of the two departments in a few weeks will constitute the biggest state government shakeup since former Gov. John Engler reorganized Community Health and the administration of the Medicaid health care program for low-income residents in 1996.

Human Services has 10,000 state workers and a $4 billion annual budget. Community Health has a $17.4 billion budget and 3,648 employees.

The Republican governor said he wants a "one-stop shop" for human services as part of his "river of opportunity" efforts.

Nick Lyon, who is interim head of both departments, said the goal is to do a better job of meeting the needs of an "underserved population."

Under existing programs, it's often hard to determine what a client may or may not qualify for among the various programs — most of which have federal components, said Lyon, who'd like to become the director of the merged department.

"The first thing we have to figure out is where can we be more efficient with the federal government," Lyon said. "Part of what we ran into with the Healthy Michigan Plan (the state's Medicaid expansion), for example, is the income eligibility requirements are different between human services programs and health programs."

Human Services and Community Health already jointly administer Michigan's Medicaid health insurance program for low-income adults, children, seniors and disabled residents.

"Nick Lyon is going to have his hands full," said Dan Pero, a former chief of staff under Engler.

"There is so much overlap with Medicaid, Medicare, mental health and dual-eligibles. On paper, it makes a lot of sense. But those are two of the biggest departments in state government. That could be an unwieldy thing."

In arguing for the reorganization, Snyder cited more than 145 government assistance programs that are focused on workforce development, children and health, which he said represent a "failing" model of bureaucracy that has grown over decades.

His plan drew concern from the Michigan Association of Counties, whose government expert wondered if it would lead to cuts or reduced local access to services for needy citizens.

"Our concern is that a reorganization of state departments could make it more difficult for Michigan residents to access the services they need, if this includes cuts or forced mergers at the county level," said Dana Gill, the group's governmental affairs associate.

"These departments, in particular, serve many of the state's most vulnerable residents."

Others embraced Snyder's initiative.

"Merging the Departments of Community Health and Human Services presents an opportunity for policymakers to enhance the assistance citizens need to distance themselves from poverty," said Michigan Catholic Conference CEO Paul Long.

Tom Watkins, president and CEO of the Detroit Wayne County Mental Health Authority, said he would collaborate with Lyon to ensure "this sensible change produces progress for some of our most vulnerable citizens."

It is a "positive approach to make government serve people — not power, control, politics and programs," said Watkins, mental health director under ex-Gov. James Blanchard, a Democrat.

gheinlein@detroitnews.com

Other gov initiatives

An energy policy to be rolled out in March. He'll also describe a new Agency for Energy to oversee state policies.

Plans for a law to reduce prescription drug and opioid abuse. He will provide details in October.

Legislation and a "commission outside state government" to improve third-grade reading tests scores and proficiency.

New criminal justice policies to be outlined in a March special message.

An "early warning" system for public school systems matching criteria lawmakers and Snyder developed last year to respond more nimbly to financial crises in cities.

A March series of statewide jobs and education summits aimed toward policies that break down "arbitrary barriers" to higher education and improve skilled trades training.

— Gary Heinlein

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