SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549


                                FORM 10-Q

           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                 THE SECURITIES AND EXCHANGE ACT OF 1934

              FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999


                     Commission file number 1-12055


                    PARACELSUS HEALTHCARE CORPORATION
         (Exact name of registrant as specified in its charter)


     CALIFORNIA                                       95-3565943
(State or other jurisdiction of                    (IRS Employer
 incorporation or organization)                  Identification No.)


            515 W. GREENS ROAD, SUITE 800, HOUSTON, TEXAS
              (Address of principal executive offices)


        77067                                     (281) 774-5100
     (Zip Code)                    (Registrant's telephone number, including
                                                    area code)


      Securities registered pursuant to Section 12(b) of the Act:


COMMON STOCK, NO STATED VALUE                   NEW YORK STOCK EXCHANGE
    (Title of Class)                (Name of each exchange on which registered)


Indicate  by  check mark whether the registrant (1) has filed all reports
required to be  filed  by  Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding  12  months  (or for such shorter period
that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                          Yes[X]       No[   ]

As  of  May  14,  1999, there were outstanding 55,118,330 shares  of  the
Registrant's Common Stock, no stated value.


















<PAGE>2

                    PARACELSUS HEALTHCARE CORPORATION
                                FORM 10-Q

                     FOR THE QUARTERLY PERIOD ENDED
                             MARCH 31, 1999

                                  INDEX


                                                             PAGE REFERENCE
                                                               FORM 10-Q


FORWARD-LOOKING STATEMENTS                                         3


PART I.         FINANCIAL INFORMATION

   Item 1.      Financial Statements-- (Unaudited)

               Condensed Consolidated Balance Sheets--
               March 31, 1999 and December 31, 1998                4

               Consolidated Statements of Operations--
               Three Months Ended March 31, 1999 and 1998          5

               Condensed Consolidated Statements of Cash Flows-
               Three Months Ended March 31, 1999 and 1998          6

               Notes to Interim Condensed Consolidated
               Financial Statements                                7


   Item 2.     Management's Discussion and Analysis of
               Financial Condition and Results of Operations      12

PART II.       OTHER INFORMATION                                  17

SIGNATURE                                                         18





























<PAGE>3

FORWARD-LOOKING STATEMENTS

     Certain statements in this Form 10-Q are "forward-looking statements" made
pursuant to the safe  harbor  provisions  of  the Private Securities Litigation
Reform Act of 1995. Forward-looking statements  involve  a  number of risks and
uncertainties.  Factors which may cause the Company's actual  results in future
periods to differ materially from forecast results include, but are not limited
to:  the  outcome  of  litigation  pending  against  the  Company  and  certain
affiliated  persons;  general economic and business conditions, both nationally
and  in  the  regions  in  which   the  Company  operates;  industry  capacity;
demographic changes; existing government  regulations  and  changes  in, or the
failure  to  comply  with  government  regulations;  legislative  proposals for
healthcare reform; the ability to enter into managed care provider arrangements
on  acceptable  terms;  changes in Medicare and Medicaid reimbursement  levels;
liabilities and other claims  asserted  against  the  Company; competition; the
loss of any significant customer; changes in business strategy,  divestiture or
development  plans;  the  ability  to  attract  and retain qualified personnel,
including physicians; the impact of Year 2000 issues;  fluctuations in interest
rates on the Company's variable rate indebtedness; the continued listing of the
Company's common stock on the New York Stock Exchange; the Company's ability to
divest  assets  to  reduce  indebtedness  and to realize its  tax  assets;  the
availability and terms of capital to fund working  capital requirements and the
expansion  of  the  Company's  business;  and the final resolution  of  certain
proposed  settlement  to  litigation  including   the  court  approval  of  the
settlement terms and the fulfillment of the conditions  contained  therein. The
Company  is  generally  not  required to, and does not undertake to, update  or
revise its forward-looking statements.









































<PAGE>4

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                   PARACELSUS HEALTHCARE CORPORATION

                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            ($ in 000's)
<TABLE>
<CAPTION>
                                                     MARCH 31,     DECEMBER 31,
                                                        1999          1998
                                                    -----------    ------------
<S>                                                 <C>            <C>
                                                    (Unaudited)      (Note 1)
ASSETS
Current assets:
    Cash and cash equivalents                        $    5,645    $   11,944
    Restricted cash                                       6,736         1,029
    Accounts receivable, net                             54,561        67,332
    Deferred income taxes                                 9,641         9,641
    Other current assets                                 48,137        38,923
                                                     ----------     ---------
        Total current assets                            124,720       128,869

Property and equipment                                  534,972       531,908
Less: Accumulated depreciation and amortization        (173,749)     (168,009)
                                                     ----------    ----------
                                                        361,223       363,899

Goodwill                                                135,699       136,994
Other assets                                             85,193        86,340
                                                     ----------    ----------
        Total assets                                 $  706,835    $  716,102
                                                     ==========    ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                 $   45,484    $   41,301
    Accrued liabilities and other                        42,824        58,758
    Current maturities of long-term debt                  5,451         6,284
                                                     ----------    ----------
        Total current liabilities                        93,759       106,343

Long-term debt                                          541,246       533,048
Other long-term liabilities                              39,075        42,370
Stockholders' equity:
    Common stock                                        222,977       222,977
    Additional paid-in capital                              390           390
    Accumulated deficit                                (190,612)     (189,026)
                                                     ----------     ---------
        Total stockholders' equity                       32,755        34,341
                                                     ----------     ---------
Total Liabilities and Stockholders' Equity           $  706,835     $ 716,102
                                                     ==========     =========
</TABLE>

                                      See accompanying notes.












<PAGE>5

                    PARACELSUS HEALTHCARE CORPORATION

                  CONSOLIDATED STATEMENTS OF OPERATIONS
                   ($ in 000's, except per share data)
                               (Unaudited)

                                                         THREE MONTHS ENDED
                                                              MARCH 31,
                                                    ------------------ -------
                                                      1999             1998
                                                    ----------     -----------
<TABLE>
<CAPTION>
<S>                                                 <C>            <C>
Net revenue                                         $  150,944     $  186,882
Costs and expenses:
  Salaries and benefits                                 58,965         75,116
  Other operating expenses                              58,085         74,707
  Provision for bad debts                               12,398         10,517
  Interest                                              13,104         12,379
  Depreciation and amortization                          9,815          9,276
  Unusual charges                                        1,123              -
                                                    ----------     ----------
        Total costs and expenses                       153,490        181,995
                                                    ----------     ----------
Income (loss) before minority interest, income
 taxes and extraordinary charge                         (2,546)         4,887
Minority interests                                          63         (2,585)
                                                    ----------     ----------
Income (loss) before income taxes and
 extraordinary charge                                   (2,483)         2,302
Provision (benefit) for income taxes                      (897)           677
                                                    ----------     ----------
Income (loss) before extraordinary charge               (1,586)         1,625
Extraordinary charge on extinguishment of debt, net          -         (1,175)
                                                    ----------     ----------
Net income (loss)                                   $   (1,586)    $      450
                                                    ==========     ==========
Earnings (loss) per share - basic and assuming
dilution:
   Income (loss) before extraordinary charge        $    (0.03)     $    0.03
   Extraordinary charge on extinguishment of debt, net       -          (0.02)
                                                    ----------      ---------
Net income (loss) per share                         $    (0.03)     $    0.01
                                                    ==========      =========

</TABLE>

                                      See accompanying notes.



















<PAGE>6

                    PARACELSUS HEALTHCARE CORPORATION

             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               ($ in 000's)
                                (Unaudited)

                                                         THREE MONTHS ENDED
                                                              MARCH 31,
                                                    -------------------------
                                                        1999          1998
                                                    -----------    ----------
<TABLE>
<CAPTION>
<S>                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                   $   (1,586)    $      450
Non-cash expenses and changes in operating
assets and liabilities                                  (3,824)        (7,951)
                                                    ----------     ----------
Net cash used in operating activities                   (5,410)        (7,501)
                                                    ----------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment, net                (5,610)        (3,836)
Decrease in other assets, net                           (2,644)         2,037
                                                    ----------     ----------
Net cash used in investing activities                   (8,254)        (1,799)
                                                    ----------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities                      10,000              -
Repayments under credit facilities                        (600)             -
Repayments of debt, net                                 (2,035)          (772)
Deferred financing costs                                     -         (3,984)
                                                    ----------     ----------
Net cash provided by (used in) financing activities      7,365         (4,756)
                                                    ----------     ----------
Decrease in cash and cash equivalents                   (6,299)       (14,056)
Cash and cash equivalents at beginning of period        11,944         28,173
                                                    ----------     ----------
Cash and cash equivalents at end of period          $    5,645     $   14,117
                                                    ==========     ==========

Supplemental Cash Flow Information:
   Interest paid                                    $   20,461     $   20,877
   Income taxes paid                                $        -     $       49

Noncash Investing Activities:
   Notes receivable from sale of hospital           $    2,269     $        -

</TABLE>

                         See accompanying notes.

















<PAGE>7

                      PARACELSUS HEALTHCARE CORPORATION

      NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               (Unaudited)

                             March 31, 1999

NOTE 1.    ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION - Paracelsus Healthcare Corporation (the "Company") was
incorporated in November 1980  for  the  principal  purpose of owning and
operating  acute  care  and  related  healthcare businesses  in  selected
markets.   The  Company  presently  operates   15  hospitals  with  1,878
licensed beds in 9 states, of which 11 are owned and four are leased. The
Company also operates four skilled nursing facilities with a total of 232
licensed  beds  in  California, one of which is leased.   See  Note  6  -
Subsequent Event.

BASIS OF PRESENTATION  -  On  July  1,  1998,  the  Company completed the
purchase  of Dakota Medical Foundation's 50% partnership  interest  in  a
general partnership operating as Dakota Heartland Health Systems ("DHHS")
thereby giving  the  Company  100%  ownership  of  DHHS.   Prior  to  the
purchase,  the Company owned 50% of DHHS and accounted for its investment
under the equity  method.  The  transaction  was  accounted for as a step
purchase acquisition. As a result of this change in  control, the Company
has recast its 1998 consolidated statement of operations  to  account for
DHHS   under   the  consolidated  method  of  accounting  as  though  the
transaction had occurred on January 1, 1998.

     The  accompanying   unaudited   condensed   consolidated   financial
statements of the Company have been prepared in accordance with generally
accepted accounting principles for interim financial information and with
the  instructions  to Form 10-Q. Accordingly, they do not include all  of
the information and  notes  required  by  generally  accepted  accounting
principles for annual financial statements. In the opinion of management,
all  adjustments, consisting of normal recurring accruals, considered necessary
for a fair presentation have  been included. The balance  sheet at March 31,
1999, has been derived from the unaudited financial statements  at  that date
but does not include all of the information and footnotes required  by
generally accepted accounting principles  for  a  complete set of financial
statements.  The  Company's business is seasonal in nature and subject to
general economic conditions and other factors. Accordingly,  operating  results
for the three months ended March 31, 1999, are not necessarily indicative of
the results that may  be expected for the year ending December 31, 1999.  These
financial statements  should  be  read in conjunction with the audited 
consolidated financial statements and  notes  thereto  for the year ended
December 31, 1998, included in the Company's 1998 Form 10-K.

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management  to make estimates and
assumptions  that affect the reported amounts of assets  and  liabilities
and disclosure  of  contingent  assets and liabilities at the date of the
financial statements and the reported  amounts  of  revenues and expenses
during  the  reporting  period.  Actual results could differ  from  those
estimates.

ACCOUNTING PRONOUNCEMENTS  -  In  March  and  April  1998, the Accounting
Standards  Executive  Committee  of the American Institute  of  Certified
Public  Accountants  issued two Statements  of  Position  ("SOPs")  which
applied to the Company  in  the  first quarter ended March 31, 1999.  SOP
98-1,  "Accounting  for  the  Costs of  Computer  Software  Developed  or
Obtained for Internal Use," provides  guidance on the circumstances under
which the costs of certain computer software should be capitalized and/or
expensed.  SOP 98-5, "Reporting on the  Costs  of  Start-Up  Activities,"
requires such costs to be expensed as incurred instead of capitalized and
amortized.  The  adoption  of  the  SOPs  had  no material impact on  the
Company's financial condition or results of operations.

<PAGE>8

EARNINGS PER SHARE - The following table sets forth  the  computation  of
basic and diluted earnings per share (dollars in thousands, except per share
amounts).

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED   THREE MONTHS ENDED
                                          MARCH 31, 1999       MARCH 31, 1998
                                        ------------------   ------------------
<S>                                          <C>                 <C>
Numerator (a):
   Income  (loss)  before extraordinary
      charge                                 $ (1,586)           $  1,625
   Extraordinary charge                             -              (1,175)
                                             --------            --------
   Net income (loss)                         $ (1,586)           $    450
                                             ========            ========
Denominator:
  Weighted average shares used for basic
   earnings per share                          55,118              55,093
   Effect of dilutive securities:
      Employee stock options                        -               2,446
                                             --------            --------
   Dilutive potential common shares                 -               2,446
                                             --------            --------
      Shares used for diluted earnings
       per share                               55,118              57,539
                                             ========            ========
Income (loss) per share - basic
   assuming dilution:
      Income (loss) before extraordinary     $  (0.03)           $  0.03
        charge
      Extraordinary charge                          -             ( 0.02)
                                             --------            -------
      Net income (loss)                      $  (0.03)           $  0.01
                                             ========            =======

</TABLE>
-------------------------------
(a)   Amount  is  used  for  both  basic  and  diluted earnings per share
computations since there is no earnings effect related  to  the  dilutive
securities.

     Options  to purchase 4,783,649 and 4,988,288 shares of the Company's
common stock at  a weighted average exercise price of $7.47 and $7.37 per
share and warrants  to  purchase 414,906 and 422,286 shares at a weighted
average exercise price of  $9.00  and  $8.84  per  share were outstanding
during the quarter ended March 31, 1999 and 1998, respectively,  but were
not  included  in  the  computation  of  diluted EPS because the options'
exercise price was greater than the average  market  price  of the common
shares.

COMPREHENSIVE INCOME - Comprehensive loss for the quarter ended March 31,
1999  equaled  net  loss  of  $1.6  million  as compared to comprehensive
income, which equaled net income, of $450,000  for  the  same  period  in
1998.

RESTRICTED  CASH  -  The  Company had restricted cash of $6.7 million and
$1.0 million at March 31, 1999  and  December 31, 1998, respectively, for
payments related to the commercial paper financing program.








<PAGE>9

NOTE  2. UNUSUAL CHARGES

      As previously reported, on November  25,  1998, the Company and its
senior executives, Mr. Charles R. Miller, Mr. James  G.  VanDevender  and
Mr. Ronald R. Patterson executed an agreement ("the Executive Agreement")
superseding  their  existing employment contracts and certain other stock
option and retirement  agreements  with  the Company.  As a result of the
Executive Agreement, the Company recorded  a  net  unusual charge of $1.1
million, representing a charge of $1.8 million relating  to  the  ratable
portion of required-stay amounts to be paid to the executives, offset  by
a gain of $671,000 from the amortization of the deferred gain recorded in
connection with certain stock options forfeited by the senior executives.
The  Company  expects  to  record  an  additional charge of $1.1 million, in
the quarter ended June 30, 1999.  As of March  31,  1999,  the Company had
funded to an escrow account amounts payable to the senior executives.  As
a  result of the satisfactory fulfillment of certain terms and conditions
set  forth  in  the  Executive  Agreement,  on April 14, 1999, the senior
executives  were  paid  from  the escrow account  amounts  totaling  $2.7
million, which represented the  after-tax  balance  of  the  $4.6 million
payments as specified by the Executive Agreement.

NOTE 3. DISPOSITION OF HOSPITAL

     Effective March 31, 1999, the Company sold Paracelsus Bledsoe County
Hospital,  Inc.  ("Bledsoe"),  which  operated a 32 licensed-bed facility
located in Pikeville, Tennessee. The sales  price  of approximately  $2.2
million, including working capital, was paid by a combination of $100,000
in  cash and the issuance  by  the buyer of  $2.1 million  of  promissory
notes.  The  notes are secured by all outstanding common stock and assets
of Bledsoe. Certain  of  the  notes  may  be adjusted for any increase or
decrease  from  a final adjustment of net working  capital.  The  Company
recorded no material  gain  or  loss  on  the sale.  Bledsoe's results of
operations in the quarter ended March 31, 1999  were  not material to the
Company's consolidated statements of operations.  The pro forma effect of
the  disposition of Bledsoe on the Company's 1998 results  of  operations
was previously reported in the Company's Current Report on Form 8-K dated
April 15, 1999.

NOTE 4. OPERATING SEGMENTS

     The  Company segregates its hospitals into core and non core markets
("Core Facilities"  and  "Non  Core Facilities", respectively). There has
been  no  material  change  in  the composition  of  Core  and  Non  Core
Facilities or in the accounting policies  of  the  segments as previously
reported in the Company's 1998 Form 10-K. The Company  does  not allocate
income taxes, senior bank debt interest, or subordinated note interest to
its reportable segments.  These items, along with overhead costs, and the
operations  of  sold/closed  facilities,  including  Bledsoe,  have  been
included in the All Other category.  Selected segment information for the
quarters ended March 31, 1999 and 1998 are as followed:


















<PAGE>10

<TABLE>
<CAPTION>
                                 THREE MONTHS  ENDED MARCH 31, 1999
                        ------------------------------------------------
                          CORE        NON CORE     ALL OTHER     TOTAL
                        ---------    ----------   ----------   ---------
<S>                     <C>          <C>          <C>          <C>
Net revenue........     $ 126,056    $  21,701    $   3,187    $ 150,944
Adjusted EBITDA (a)     $  25,188    $   1,610    $  (5,239)   $  21,559
</TABLE>

<TABLE>
<CAPTION>

                                 THREE MONTHS ENDED MARCH 31, 1998
                        ------------------------------------------------
                          CORE        NON CORE     ALL OTHER     TOTAL
                        ---------    ----------   ----------   ---------
<S>                     <C>           <C>         <C>          <C>
Net revenue             $ 128,046     $  23,776   $  35,060    $ 186,882
Adjusted EBITDA (a)     $  23,476     $   3,153   $  (2,672)   $  23,957
</TABLE>
-------------------------------------
(a) Earnings before extraordinary charge, interest, taxes, depreciation,
   amortization and unusual charges.

NOTE  5.    CONTINGENCIES

SHAREHOLDERS LITIGATION - On March 24, 1999, the Company executed certain
agreements  providing for a proposed global settlement that will  resolve
substantially  all  claims  against  the  Company  from outstanding class
action and derivative lawsuits arising out of or related  to  the  August
1996  merger.  The  settlement  agreements,  which  are  described in the
Company's  1998 Form 10-K, are subject to final approval by  the  federal
district court (the "Court").

     On May  13,  1999, insurance proceeds of approximately $12.3 million
were transferred to  the  class settlement fund. The Company expects that
its insurance carriers will  make  an additional transfer of $1.7 million
to the fund for a total of $14.0 million.   On  May  14,  1999, the Court
held  a  hearing  on  whether,  among  other things, to grant preliminary
approval of the proposed global settlement.   If the approval is granted,
a notice of the class settlement will be sent to the members of the class
and a notice of the derivative settlement will  be  sent  to  all current
shareholders.   After  an  opt-out  and  comment  period,  the Court will
determine  whether  to  grant final approval.  There can be no  assurance
that  the  Court will approve  the  settlement  agreements  or  that  the
conditions contained  in  any  such  agreements  will  be  satisfactorily
fulfilled.

DEBT  COMPLIANCE - The Company was in compliance with all debt  covenants
to which  it  was  subject as of March 31, 1999.  The Company's continued
compliance with its  debt  covenants  is  predicated  on  its  ability to
maintain  certain  levels of operating performance and on its ability  to
sell certain non-core  assets  and  to  reduce  debt.   If the Company is
unable to meet these objectives, it will be required to seek waivers from
its  lenders in the future. However, there can be no assurance  that  the
Company will be able to obtain such waivers, if needed.

IMPACT OF YEAR 2000 - As with most other industries, hospitals and health
care systems use information systems that may misidentify dates beginning
January   1,  2000,  and  result  in  system  or  equipment  failures  or
miscalculations.  Information systems include computer programs, building
infrastructure components  and  computer-aided  biomedical equipment. The
Company has a Year 2000 strategy for its hospitals  that  includes phases
for education, inventory and assessment of applications and  equipment at
risk,  analysis and planning, testing, conversion/remediation/replacement
and post-implementation.  The  Company  can  provide  no  assurances that
<PAGE>11

applications and equipment the Company believes to be Year 2000 compliant
will not experience difficulties, or that the Company will not experience
difficulties obtaining resources needed to make modifications  to correct
or replace the Company's affected systems and equipment. Failure  by  the
Company  or  third parties on which it relies to resolve Year 2000 issues
could  have  a material  adverse  effect  on  the  Company's  results  of
operations and its ability to provide health care services. Consequently,
the Company can  give no assurances that issues related to Year 2000 will
not have a material  adverse  effect on the Company's financial condition
or results of operations. See "Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations" for further discussion.

NOTE 6. SUBSEQUENT EVENTS

     On May 5, 1999, the Company entered into a definitive agreement  for
the sale of four Non Core Facilities, which, on a combined basis, operate
246  licensed  beds.  The  sale  included  the  remaining  two  Tennessee
hospitals  and two other hospitals located Georgia and Mississippi.   The
transaction  is subject to the normal due diligence by the buyer, and the
Company expects  the  sale  to be completed in the quarter ended June 30,
1999.  However, there can be no assurance on the final outcome of the due
diligence process or that the  terms  and  conditions  of  the definitive
agreement will be satisfactorily fulfilled.













































<PAGE>12

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

     The  comparison  of operating results for 1999 with prior  years  is
difficult  given  the  acquisitions  and  divestitures  in  the  affected
periods.  "Same hospitals"  as  used  in  the following discussion, where
appropriate, consist of acute care hospitals owned throughout the periods
for which comparative operating results are presented. Accordingly, "same
hospitals" exclude facilities sold in 1998  and  Bledsoe,  which was sold
March  31,  1999,  and  include  DHHS which was consolidated in 1998  and
included  in  the  Company's  results  of  operations  for  both  periods
presented.

     Changes in Medicare payments  mandated by the Balanced Budget Act of
1997 (the "1997 Budget Act"), which  became effective October 1, 1997, as
well as certain proposed changes to various  states'  Medicaid  programs,
have  reduced  revenues  and earnings significantly as these changes  are
phased in through 1999.  The  most  significant changes were phased in by
October   1,  1998.   The  Medicare/Medicaid   programs   accounted   for
approximately 48.9% of gross patient revenues for the quarter ended March
31, 1999 and 52.6% for the same period in 1998.

     Pressures  to  control healthcare costs and a shift from traditional
Medicare/Medicaid  and from traditional indemnity insurers have  resulted
in an increase in the number of patients whose healthcare coverage  is
provided  under  managed  care plans.  The percentage  of  the  Company's
gross  patient  revenues attributable  to managed care increased to 33.8%
in the quarter ended  March 31, 1999 from 30.9%  in the same period in
1998. The Company generally  receives  lower payments  per  patient  from
managed  care  payors  than  it  does  from traditional  indemnity insurers.
The Company anticipates that its managed care business will continue to
increase in the future.

RESULTS OF OPERATIONS - QUARTER ENDED MARCH 31, 1999
COMPARED WITH QUARTER ENDED MARCH 31, 1998

     Net revenue  for  the  quarter  ended  March  31,  1999,  was $150.9
million,  a decrease of $36.0 million, or 19.2%, from $186.9 million  for
the same period in 1998. The decline in net revenue is largely due to the
ten hospitals  sold  in June and September of 1998. The remaining decline
in net revenue occurred  at  the Company's "same hospitals," as discussed
below.

     Net revenue at "same hospitals" for the quarter ended March 31, 1999
was $147.8 million compared to $151.8 million in 1998, a decrease of $4.0
million, or 2.7%. Same hospitals net revenue at Core Facilities decreased
$2.0 million, or 1.6%, from $128.1  million  in 1998 to $126.1 million in
1999.   Same hospital net revenue at Non Core Facilities  decreased  $2.1
million,  or  8.7%,  from $23.8 million in 1998 to $21.7 million in 1999.
Among the Non Core Facilities, the Tennessee market hospitals, which have
significant home health  operations,  decreased  $1.3  million, or 15.1%,
from  $8.8 million in 1998 to $7.5 million in 1999. The decrease  in  net
revenue at the Company's "same hospitals" is due to the Company's closure
of 27 home health offices and two skilled nursing facilities and the sale
of two  home  health agencies in 1998 in response to the 1997 Budget Act.
While the restructuring  of  the  home  health  operations  is  likely to
continue  in  1999,  which  will  further reduce net revenue, the Company
anticipates that the effect of the 1997 Budget Act on payment levels will
not significantly impact the Company's net revenue in 1999.

     The  Company's  "same hospitals"  experienced  a  2.5%  increase  in
inpatient admissions from  14,933  in the quarter ended March 31, 1998 to
15,305  in the comparable period in 1999.   Same  hospital  patient  days
increased  3.4%  from  69,618  in  1998 to 71,988 in 1999. Excluding home
health visits, outpatient visits in  "same hospitals" increased 6.2% from
155,882  in  1998  to 165,535 in 1999. The  increase  in  admissions  and
<PAGE>13

outpatient visits resulted  from (i) a delayed flu season in some markets
in the current year, (ii) population  growth in certain markets, (iii) an
increase  in the number of physicians and  services  at  several  of  the
Company's hospitals  and  (iv)  increased  volume  generated from certain
hospital benchmarking and service awareness programs implemented in 1998.
 Home health visits in "same hospitals" decreased 39.4%  from  122,617 in
1998  to  74,352  in 1999 primarily due to the closures or sales of  home
health operations as discussed above.

     The following  table  presents "same hospitals" operating statistics
for the Company's Core and Non  Core  Facilities  for  the quarters ended
March 31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                       "SAME HOSPITALS"
                                                 ------------------------------
                                                  THREE MONTHS ENDED MARCH 31,
                                                 ------------------------------
                                                  1999         1998    % CHANGE
                                                 -------     -------   --------
<S>                                              <C>          <C>          <C>
Core Facilities
---------------
Patient Days                                      59,678      57,230      4.3%
Inpatient Admissions                              12,477      12,270      1.7
Outpatient Visits, excluding Home Health         139,399     127,035      9.7
Home Health Visits...............                 46,424      74,463    (37.7)

Non Core Facilities
-------------------
Patient Days                                      12,310      12,388     (0.6)%
Inpatient Admissions                               2,828       2,663      6.2
Outpatient Visits, excluding Home Health          26,136      28,847     (9.4)
Home Health Visits                                27,928      48,154    (42.0)

</TABLE>

     Operating expenses (salaries and  benefits, other operating expenses
and provision for bad debts), expressed  as  a percentage of net revenue,
and  operating  margin  remained flat at 85.8% and  14.2%,  respectively,
between the quarters ended  March  31, 1999 and 1998.  Operating expenses
decreased $30.9 million from $160.3  million  in  the quarter ended March
31, 1998 to $129.4 million in 1999 primarily from closed/sold facilities.
Excluding  sold/closed  facilities,  same  hospital  operating   expenses
decreased by approximately $1.6 million primarily from (i) a decrease  of
$3.9  million  in  salaries  and  benefits  and  other operating expenses
resulting from cost cutting measures implemented in the fourth quarter of
1998 offset by (ii) an increase in provision for bad debt of $2.3 million
due  largely  to  collection issues arising from information systems
conversions and personnel turnover at several hospitals.

     Operating expenses  at  the  Company's  "same  hospitals"  increased
slightly  from  80.8%  of  net  revenue  in  1998  to  81.9% in 1998, and
operating margins decreased from 19.2% to 18.1%, respectively. The slight
deterioration  in operating margins occurred primarily at  the  Non  Core
Facilities, which declined from 13.3% in 1998 to 7.4% in 1999, due to the
closure of home health operations in response to the 1997 Budget Act, overall
volume reductions at these facilities and an increase  in  the  provision
for bad debt due to reasons  stated  above.   On  a  "same  hospital"  basis,
Core  Facility operating margins remained relatively constant at 19.9% in 1999
and 20.4% in 1998, despite a 22.2% increase in provision for bad debt due to
information systems conversions   and   personnel  turnover  as  previously
discussed. Management believes that the information systems conversions and 
personnel turnover issues have been addressed and that bad debt expense should
be in line with historical results in future quarters. As previously reported,
the Company undertook a series of strategic actions in 1998 to lower its cost
structure in response to the 1997 Budget Act.  These actions included exiting
unprofitable  home
<PAGE>14

health  businesses  in several markets and implementing staff and wage
reductions and other cost cutting  measures.  Such efforts have contributed to
the stability of the Company's operating margins on a consolidated basis.
Management believes that the cost  savings  associated  with these initiatives
will favorably impact  the Company's results of operations  throughout  1999.
However, there can  be no assurance that the Company will achieve its desired
cost structure or  that  any  cost  reductions  will  be  sufficient to offset
present  and/or  future government initiatives or reductions  in  current
levels of utilization.

     Interest expense  increased  $725,000  from  $12.4  million  in  the
quarter  ended  March 31, 1998 to $13.1 million in 1999, primarily due to
an increase in borrowings  under the credit facilities and the commercial
paper program, which was partially offset by a decrease in interest rates
under the credit facilities.

     Depreciation and amortization  expense  increased $539,000 from $9.3
million the quarter ended March 31, 1998 to $9.8  million  for  the  same
period in 1999 primarily due to additions to property and equipment since
April 1, 1998.

     Loss  before  income  taxes and extraordinary charge of $2.5 million
for the quarter ended March  31, 1999, included an unusual charge of $1.1
million resulting from the Executive Agreement executed in November 1998.
The Company expects to record  an  additional  $1.1  million  of  unusual
charges relating to the Executive Agreement in the quarter ended June 30,
1999.   Income  before  income  taxes  and  extraordinary  charge of $2.3
million for the quarter ended March 31, 1998 included minority  interests
of  $2.5  million  attributable to DHHS.  The Company acquired its former
partner's  50% interest in DHHS in July 1998.

     The Company recorded  income tax benefit of $897,000 on pre-tax loss
of $2.5 million in the quarter  ended  March  31,  1999  and  income  tax
expense of $677,000 on pre-tax income of $2.3 million for the same period
in 1998.  Income tax benefit in 1999 differed from the statutory rate due
to  nondeductible goodwill amortization which was offset by a non-taxable
gain  related  to  the  Executive  Agreement.  Income tax expense in 1998
differed   from   the  statutory  rate  due  to  nondeductible   goodwill
amortization which  was  partially  offset  by  a  decrease  in valuation
allowance.

     Net  loss for the quarter ended March 31, 1999 was $1.6 million,  or
$0.03 per diluted share, compared to net income of $450,000, or $0.01 per
diluted share,  for  the same period of 1998. Net income in 1998 included
an extraordinary charge  for the write-off of deferred loan costs of $1.2
million (no tax benefit),  or  $0.02  per  share,  relating to the credit
facility in existence prior to March 30, 1998.  Weighted  average  common
and  common  equivalent  shares  outstanding were 55.1 million in 1999 as
compared to 57.5 million in 1998.   The  decrease is due to the effect of
dilutive securities which were excluded due to their anti-dilutive effect
on 1999 net loss.

LIQUIDITY AND CAPITAL RESOURCES

     The Company had net working capital of  $31.0  million  at March 31,
1999,  an  increase  of  $8.5 million from $22.5 million at December  31,
1998. The increase in net  working  capital  resulted  primarily from the
reclassification of certain notes receivable from sale of  facilities  to
current assets as of March 31, 1999 and the payments of accrued expenses.
The  Company's long-term debt as a percentage of total capitalization was
94.3% at March 31, 1999, compared to 93.9%  at December 31, 1998.

     Net  cash  used  in  operating  activities  was  $7.5 million in the
quarter  ended March 31, 1998 as compared to $5.4 million  for  the  same
period of  1999.   Net cash used in investing activities was $8.3 million
during 1999, as compared  to  $1.8 million during 1998.  The $6.5 million
increase  in  net  cash  used  in  investing   activities  was  primarily
attributable to increases in additions to property and equipment and in
<PAGE>15

other assets. Net cash provided by financing activities  during  1999 was
$7.4  million, compared to net cash used in financing activities of  $4.8
million  during  1998. The $12.2 million increase resulted primarily from
an increase in net borrowings in 1999 and the payment in 1998 of deferred
financing costs associated  with the refinancing of the credit facilities
in March 1998.

     During the quarter ended  March  31,  1999, the Company funded to an
escrow  account  amounts  payable  to  the senior  executives  under  the
Executive  Agreement.  As  a result of the  satisfactory  fulfillment  of
certain terms and conditions  set  forth  in  the agreement, on April 14,
1999,  the senior executives were paid from the  escrow  account  amounts
totaling  $2.7  million,  which  represented the after-tax balance of the
$4.6 million payments as specified by the Executive Agreement.

     As of  May 7, 1999, the Company  had  $32.8  million  available  for
borrowings  under its credit facilities, subject to the terms thereof, to
fund future capital  expenditures,  working  capital requirements and the
issuance of letters of credit.  Additionally, approximately $20.4 million
remained  available  for borrowings under the commercial  paper  program,
subject to the availability  of  the  eligible  accounts  receivable. The
Company was in compliance with all debt covenants to which it was subject
as of March 31, 1999.  The Company's continued compliance with  its  debt
covenants  is  predicated  on  its  ability to maintain certain levels of
operating performance and on its ability  to sell certain non-core assets
and to reduce debt.  If the Company is unable  to  meet these objectives,
it  will  be  required to seek waivers from its lenders  in  the  future.
However, there  can  be  no  assurance  that  the Company will be able to
obtain such waivers, if needed.

     The  Company  anticipates  that  internally  generated   cash  flows  from
earnings,  existing  cash balances, borrowings under the credit facilities  and
the commercial paper program,  proceeds from the sale of facilities, income tax
refunds and permitted equipment leasing arrangements will be sufficient to fund
future capital expenditures and  working  capital  requirements  through  1999.
There  can  be  no  assurance that the above sources will sufficiently fund the
Company's liquidity needs  or that future developments in the hospital industry
or general economic trends will  not  adversely affect the Company's operations
or its liquidity.

LITIGATION

     On March 24, 1999, the Company executed certain agreements providing
for  a  proposed global settlement that will  resolve  substantially  all
claims against  the  Company from outstanding class action and derivative
lawsuits arising out of  or  related  to  the  August  1996  merger.  The
settlement agreements, which are described in the Company's 1998 Form 10-
K, are subject to final approval by the Court.

     On  May  13, 1999, insurance proceeds of approximately $12.3 million
were transferred  to  the class settlement fund. The Company expects that
its insurance carriers  will  make an additional transfer of $1.7 million
to the fund for a total of $14.0  million.   On  May  14, 1999, the Court
held  a  hearing  on  whether,  among other things, to grant  preliminary
approval of the proposed global settlement.   If the approval is granted,
a notice of the class settlement will be sent to the members of the class
and a notice of the derivative settlement will  be  sent  to  all current
shareholders.   After  an  opt-out  and  comment  period,  the Court will
determine  whether  to  grant final approval.  There can be no  assurance
that  the  Court will approve  the  settlement  agreements  or  that  the
conditions contained  in  any  such  agreements  will  be  satisfactorily
fulfilled.

     The  Company is subject to claims and legal actions by patients  and
others in the ordinary course of business.  The Company believes that all
such claims  and  actions  are  either adequately covered by insurance or
will  not  have a material adverse  effect  on  the  Company's  financial
condition, results of operations or liquidity.



<PAGE>16

YEAR 2000

     The following  discussion  updates a more complete disclosure of the
Company's Year 2000 project plan previously reported in the 1998 Form 10-
K.  The Company is on track with  its Year 2000 seven-phase project plan.
As previously reported, the Company completed the first two phases of the
project plan. Phases three and four  involving  vendor  certification and
developing  test  plans  and  compliance  criteria  for all patient  care
critical  and operations critical items are substantially  complete.  The
fifth phase,  which includes testing and identifying non-compliant items,
is scheduled for  completion  in  the second quarter of fiscal year 1999.
All hospitals and the corporate office follow guidelines set forth in the
Company's Year 2000 testing guidebook  which specifies all test plans and
procedures.  Such test plans require that  all  patient care critical or
operations  critical  systems are tested.  The Company  has developed
a data repository to track the Year 2000 compliance progress  of  patient  care
critical or operations critical equipment and applications, as well as critical
suppliers' compliance status .  Based on information from the data repository,
the Company has currently  determined  that  the  majority  of  all  items
identified  are Year 2000 compliant.  All equipment deemed not compliant will
be taken out of  service  and/or  replaced.   The Company is in the process  of
obtaining vendor  certification  for the remainder  of  the equipment and from
third parties such as fiscal intermediaries, insurance companies, banks and
local community service providers.

     The sixth and seventh phases involving converting/ replacing patient
care  and  operations critical non-compliant systems  and  equipment  and
developing  contingency  plans  for  potential  system  failure  will  be
completed in  the  fourth  quarter  of  1999 as planned.  The Company has
developed criteria to provide the basis for  its  Year  2000  contingency
plan.   The  Company  believes that each hospital already has contingency
plans which are required in order for a hospital to obtain and retain its
license.  Moreover, the  Company's  contingency  plan will include, among
others,  (i)  a  supply  chain  readiness  assessment  for  all  critical
suppliers, (ii) a staffing plan during the weekend of the  century change
and  the  scheduling  of  Year  2000  critical  personnel  to assist  and
coordinate  activities  in  the  event  of system malfunctions and  (iii)
backup  procedures  for  all  critical physical  facility  equipment  and
systems including heating, water  supply,  electrical  power,  elevators,
fire  detection  and  security, and increased fuel resources for extended
usage of emergency power.   Based  on  existing  information, the Company
believes that its estimate of Year 2000 expenses as  previously  reported
in the 1998 Form 10-K remains appropriate.

     The foregoing assessment is based on information currently available
to  the  Company. The Company can provide no assurances that applications
and equipment  the  Company  believes  to be Year 2000 compliant will not
experience  difficulties  or  that  the  Company   will   not  experience
difficulties  obtaining  resources  needed  to make modifications  to  or
replace  the Company's affected systems and equipment.   Failure  by  the
Company or  third  parties on which it relies to resolve Year 2000 issues
could  have  a material  adverse  effect  on  the  Company's  results  of
operations and its ability to provide health care services. Consequently,
the Company can  give no assurances that issues related to Year 2000 will
not have a material  adverse  effect on the Company's financial condition
or results of operations.

REGULATORY MATTERS

     Because of national, state  and  private  industry efforts to reform
healthcare  delivery and payment systems, the healthcare  industry  as  a
whole faces increased  uncertainty.  The  Company  is  unable  to predict
whether  any  other  healthcare  legislation  at the federal and/or state
level  will  be  passed  in the future and what action  it  may  take  in
response to such legislation,  but  it  continues to monitor all proposed
legislation and analyze its potential impact  in  order  to formulate its
future business strategies.

<PAGE>17

PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     On March 24, 1999, the Company executed certain agreements providing
for  a  proposed  global  settlement that will resolve substantially  all
claims against the Company  from  outstanding class action and derivative
lawsuits  arising  out of or related  to  the  August  1996  merger.  The
settlement agreements, which are described in the Company's 1998 Form 10-
K, are subject to final approval by the Court.

     On May 13, 1999,  insurance  proceeds of approximately $12.3 million
were transferred to the class settlement  fund.  The Company expects that
its insurance carriers will make an additional transfer  of  $1.7 million
to  the  fund  for a total of $14.0 million.  On May 14, 1999, the  Court
held a hearing on  whether,  among  other  things,  to  grant preliminary
approval of the proposed global settlement.  If the approval  is granted,
a notice of the class settlement will be sent to the members of the class
and  a  notice  of  the derivative settlement will be sent to all current
shareholders.  After  an  opt-out  and  comment  period,  the  Court will
determine  whether  to  grant  final approval.  There can be no assurance
that  the  Court  will approve the  settlement  agreements  or  that  the
conditions contained  in  any  such  agreements  will  be  satisfactorily
fulfilled.

     There  have  been  no  other  material  developments  in  the  legal
proceedings except as described above.

ITEM 2.   CHANGE IN SECURITIES

None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.   OTHER INFORMATION

None.

ITEM 6.   EXHIBIT AND REPORTS ON FORM 8-K

(b) Exhibits

None

27        Financial Data Schedule.

(b)  Reports on Form 8-K

     The  Company  filed on April 30, 1999, a Current Report on Form 8-K,
dated  April  15, 1999,  reporting  pursuant  to  Item  2,  the  sale  of
Paracelsus Bledsoe County Hospital, Inc. effective March 31, 1999.











<PAGE>18

                              SIGNATURE

Pursuant to the  requirements of the Securities Exchange Act of 1934, the
Registrant has duly  caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                    Paracelsus Healthcare Corporation
                                               (Registrant)


                                       /s/ JAMES G. VANDEVENDER
Dated: May 14, 1999               By:-----------------------------------
                                           James G. VanDevender
                                     Senior Executive Vice President,
                                          Chief Financial Officer
                                                & Director