When the University of Kansas Health System absorbs Olathe Health, it will expand its reach into a suburban area already teeming with new hospital activity.

The agreement, a legal transaction called a member substitution, will mark KU Health’s first expansion into southern Johnson County.

As part of the deal, KU Health said it will upgrade Olathe Health’s facilities and technology. KU Health also promised to add more specialty services to Olathe Health’s network, which includes Olathe Medical Center and Miami County Medical Center.

KU Health’s expansion into southern Johnson County reflects its need to expand its market share to maintain revenue and growth, REACH Healthcare Foundation CEO Brenda Sharpe said. Sharpe’s organization makes grants to improve health care access and equity in a six-county area.

“I think it’s evidence of continued pressure on hospitals’ bottom line,” Sharpe said. “My hope is that when these kinds of transactions are taking place, there is also some consideration given to the needs of individuals who are in areas of our county and metropolitan area who have significantly less access to hospitals and care systems in their own neighborhoods.”

The KU-Olathe Health alliance faces competition from other nearby players. The $150 million AdventhHealth South Overland Park hospital opened its doors in October 2021 at 7820 W. 165th St. in the massive ongoing Bluhawk development. The hospital provides cardiac services, surgical serves, obstetric care and a neonatal intensive care unit, adding to a full-service radiology lab and nine-bed emergency department that opened there in 2017.