DHSS Director's Message

Governor Kehoe delivered his State of the State address on January 13, 2026, one year after he was sworn in as the 58th governor. Titled “A Foundation for Growth,” the speech focused on fiscal discipline, smaller government, economic competitiveness, and growth in the key priority areas of public safety, economic development, agriculture and education. 

The governor’s speech highlighted other priorities like modernizing government including the use of artificial intelligence and efficiency through the Missouri GREAT initiative. The address ties directly to his Fiscal Year 2027 budget recommendation, which reduces more than $600 million from the general revenue core operating budget to address imbalances focusing on core government functions amid strong but challenged revenues. 

Core Enhancements: DHSS is recommended to have new funding actions (Supplementals + New Decision Items): $278.7Million (M) Total — $52M General Revenue (GR), $219M Federal, $7.7M Other. These actions are dominated by Medicaid HCBS costs to continue and federal authority adjustments.  

Core Reductions and Reallocations: There were also reductions proposed by the department. The single largest reduction is the removal of $153.9M in COVID federal authority previously carried in core. The following is a summary: 

• DHSS reduced $180,853,921 across all funds in FY27 Department Request
  • This includes $175,000 GR, $174,249,321 Federal, and $6,429,600 Other
• FY27 Governor’s Recommended Budget reduced DHSS by an additional $82,234,170 across all funds
  • This includes $52,130,932 GR, $254,734 Federal, and $29,848,504 Other
• DHSS’ total core reduction from FY26 TAFP - $263,088,091 

DHSS budget recommendations largely rebalance authority (especially federal) and targets GR of a few high visibility priorities while advancing fund swaps to relieve GR pressures. As previously noted, service expansions center on HCBS continuity, while multiple program trims or eliminations are contemplated in maternal health, environmental health, public health laboratory, local public health, and regulatory programs. The executive budget reductions largely reflect recommendations put forth by the department based on the analysis of programs and services over the past six months.  

Missouri ranks lowest among states for GR spend for core public health services at just $7 per Missourian. That amount could be doubled, and Missouri would still rank dead last. The budget, being 67% federally funded, has been significantly impacted by federal funding cuts. Continued federal budget uncertainties and anticipated reductions could significantly impact department programs and services due to the availability of and voluntary participation in federal programs. The department will continue to evaluate programs and services including how they are delivered to make changes necessary to improve efficiency and service to stakeholders and Missourians overall. 

Additional budget documents and explanations can be found at oa.mo.gov.

As previously discussed in newsletters and stakeholder meetings, the divisions of DHSS embarked on a journey to “reimagine” the programs and services offered by the department. This includes asking the important question, “Why do we do what we do?” -- the goal being to look at each program and service to evaluate the value of the program or service to the mission of the department. Leaders were also tasked with assessing if the work should be performed differently to increase efficiency. At times we must be prepared to do less in order to do more. 

The first phase of the exercise was to list every program and service using a tool developed internally in Smartsheet. Then, information was collected about each one including statutory or regulatory requirement, funding source, relation to core public health, if others could/should perform, among other points. We learned a few things going through the process and have made some adjustments. The next phase includes aligning program levels more consistently among divisions to more easily assess alignment and opportunities for blending. We will also apply another prioritization factor to decrease subjectivity. 

We recognize our colleagues and stakeholders are interested in how department leaders will make decisions during these changing and fiscally constrained times. We also recognize there are multiple approaches that can be employed. We have combined a number of approaches including MoSCoW prioritization, impact vs. effort, RICE and others to complete phase one prioritization. While we did not know for sure that state or federal changes would necessitate the quick application of our combined learning and efforts, it proved beneficial in discussions when learning there would be core reductions in the state FY27 budget.  

Many people have been involved in the various steps of the project to date including the director, deputy directors, division and deputy division directors, operational excellence team members, policy director, chief medical officer, front line leaders, and colleagues who have attended special discussions or completed surveys. Most colleagues have been involved in some way given this project didn’t begin in July 2025. It began several years ago when colleagues and stakeholders were surveyed and involved in setting the most recent strategic plan. The strategic priorities implemented a couple of years ago help to guide today’s discussions. 

The saying a “goal without a plan is just a dream” comes to mind with Project Reimagine. While phase one discussions helped us identify possible core reductions, we have a lot of work to do. The world around us is changing. The department must eliminate redundancies, prioritize programs that have the biggest impact, reduce red tape and ensure our partners are committed to quality and similar goals. Senior leaders are tasked with constantly evaluating what we do and how we do it. All staff are encouraged to submit suggestions for improvement through the staff suggestion box.   

The reality is we must adapt and change. That change may result in fewer initiatives, a smaller department, contracting differently, reorganization, increased use of AI and more. The first reaction to change is usually resistance. When you find yourself resisting, go the opposite direction and ask more questions, make more suggestions, consider more possibilities…lean in. We will figure it out together and make it work for the good of the people we serve. 

DHSS is moving away from traditional punitive disciplinary methods and embracing approaches that foster accountability, respect and collaboration. Specifically, we will implement Discipline Without Punishment (DWP)—a system designed to correct performance and behavior issues without relying on fear or penalties—by the end of 2026. 

Developed by Dick Grote, DWP is a progressive disciplinary system that focuses first on recognizing performance and coaching; and second on problem-solving rather than punishment. Instead of issuing warnings or suspensions, the process encourages employees to take ownership of their actions and make informed choices about their future with the organization. It encourages leaders to treat colleagues like adults and colleagues to act and perform like adults. A system of mutual respect. 

Traditional discipline often creates adversarial relationships, lowers morale, and fails to address the root cause of issues. DWP offers a more constructive alternative by: 

• Preserving dignity: Employees are treated as responsible adults, not as offenders. 

• Building trust: Open dialogue fosters mutual respect between employees and management. 

• Improving performance: Employees are empowered to correct issues without fear of retaliation. 

By implementing DWP, we aim to: 

• Reduce turnover. 

• Strengthen our culture of accountability and respect. 

• Enhance employee engagement and productivity. 

Director Willson led senior leaders through the program during a series of sessions occurring October-December. The next step is establishing an implementation team. During 2026, managers will receive training on the DWP process and policies will be updated and communicated. Employees can expect clear communication about expectations and support resources to help them succeed.