FORM 10-Q

                    SECURITIES AND EXCHANGE COMMISSION
                           Washington, DC 20549

      {X}  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934


              For the quarterly period ended March 31, 1999
                                    OR
      { } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934

           For the Transition period from ________ to ________

                      Commission file number 0-15846

                         First Health Group Corp.
                   (formerly HealthCare COMPARE Corp.)
          (Exact name of registrant as specified in its charter)

             Delaware                              36-3307583
  (State or other jurisdiction of    (IRS Employer Identification Number)
   incorporation or organization)

           3200 Highland Avenue, Downers Grove, Illinois 60515
            (Address of principal executive offices, Zip Code)

                              (630) 241-7900
             (Registrant's phone number, including area code)

                        __________________________
           (Former name, former address and former fiscal year,
                      if changed since last report)

  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 ________

  Indicate the number of shares outstanding of each of the issuer's classes
  of common stock, as of the latest practicable date.

  The number of shares of Common Stock, par value $.01 per share,
  outstanding on May 7, 1999, was 50,542,177.

<PAGE>

               First Health Group Corp. and Subsidiaries

                                INDEX

  Part I. Financial Information                                   Page Number
                                                                  -----------
        Item 1.  Financial Statements

        Consolidated Balance Sheets - Assets at  March 31, 1999
          and December 31, 1998 ......................                  3

        Consolidated Balance Sheets - Liabilities and Stockholders'
          Equity at March 31, 1999 and December 31, 1998                4

        Consolidated Statements of Operations for the three months
          ended March 31, 1999 and 1998 ..............                  5

        Consolidated Statements of Comprehensive Income for the
          three months ended March 31, 1999 and 1998 .                  5

        Consolidated Statements of Cash Flows for the three months
          ended March 31, 1999 and 1998 ..............                 6-7

        Notes to Consolidated Financial Statements ...                 8-10

        Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations .....                13-18
        Item 3.  Quantitative and Qualitative Disclosures About
             Market Risk .............................                 19

  Part II.  Other Information

        Item 6.  Exhibits and Reports on Form 8-K ....                 20


  Signatures..........................................                 21


<PAGE>
<TABLE>

  PART 1.  Financial Information
  First Health Group Corp. and Subsidiaries
  CONSOLIDATED BALANCE SHEETS
  (Unaudited)


  ASSETS                                  March 31, 1999 December 31, 1998
                                             -----------    -----------
  <S>                                       <C>            <C>
  Current Assets:
    Cash and cash equivalents .....         $ 18,735,000   $ 50,264,000
    Short-term investments ........              769,000        961,000
    Accounts receivable, less allowances
     for doubtful accounts of $11,176,000
     and $11,151,000, respectively            69,019,000     63,582,000
    Reinsurance recoverable .......           54,958,000     57,466,000
    Deferred income taxes .........           18,415,000     18,415,000
    Other current assets ..........           11,617,000     10,874,000
                                             -----------    -----------
    Total current assets ..........          173,513,000    201,562,000

  Long-Term Investments:
    Marketable securities .........           99,807,000    125,120,000
    Other .........................           23,979,000     23,431,000
                                             -----------    -----------
                                             123,786,000    148,551,000
                                             -----------    -----------
  Property and Equipment:
    Land, buildings and improvements          63,074,000     59,228,000
    Computer equipment and software           91,182,000     80,944,000
    Office furniture and equipment            11,746,000     13,617,000
                                             -----------    -----------
                                             166,002,000    153,789,000

    Less accumulated depreciation and
     amortization..................          (56,189,000)   (49,805,000)
                                             -----------    -----------
    Net property and equipment ....          109,813,000    103,984,000
                                             -----------    -----------
  Goodwill.........................           93,953,000    100,151,000
  Other Assets.....................            3,600,000      3,631,000
                                             -----------    -----------
                                            $504,665,000   $557,879,000
                                             ===========    ===========
</TABLE>
<PAGE>
<TABLE>

  First Health Group Corp. and Subsidiaries
  CONSOLIDATED BALANCE SHEETS
  (Unaudited)


  LIABILITIES AND STOCKHOLDERS' EQUITY

                                          March 31, 1999 December 31, 1998
                                             -----------    -----------
  <S>                                       <C>            <C>
  Current Liabilities:
    Accounts payable ..............         $ 52,825,000   $ 52,408,000
    Treasury stock purchase payable              232,000     25,000,000
    Accrued expenses ..............           25,381,000     33,545,000
    Income taxes payable ..........           10,371,000      2,611,000
    Claims reserves ...............           67,985,000     72,589,000
                                             -----------    -----------
    Total current liabilities .....          156,794,000    186,153,000

  Long-Term Debt...................          225,000,000    225,000,000
  Other Non-Current Liabilities....            8,382,000      8,599,000
                                             -----------    -----------
    Total liabilities .............          390,176,000    419,752,000
                                             -----------    -----------
  Commitments and Contingencies....                   --             --

  Stockholders' Equity:
    Common stock ..................              766,000        765,000
    Additional paid-in capital ....          180,318,000    182,842,000
    Retained earnings..............          401,723,000    384,143,000
    Accumulated comprehensive income          (3,472,000)    (3,099,000)
    Treasury stock, at cost .......         (464,846,000)  (426,524,000)
                                             -----------    -----------
    Total stockholders' equity ....          114,489,000    138,127,000
                                             -----------    -----------
                                            $504,665,000   $557,879,000
                                             ===========    ===========

</TABLE>
<PAGE>
<TABLE>

  First Health Group Corp. and Subsidiaries
  CONSOLIDATED STATEMENTS OF OPERATIONS
  (Unaudited)

                                            Three Months Ended March 31,
                                            ----------------------------
                                                1999           1998
                                            -----------    -----------
  <S>                                      <C>            <C>
  Revenues............................     $117,361,000   $127,758,000
                                            -----------    -----------
  Operating expenses:
    Cost of services .................       55,696,000     56,813,000
    Selling and marketing ............       11,742,000     12,837,000
    General and administrative .......        9,520,000     11,120,000
    Healthcare benefits ..............        2,249,000      4,093,000
    Depreciation and amortization ....        7,046,000      5,926,000
                                            -----------    -----------
                                             86,253,000     90,789,000

  Income from operations..............       31,108,000     36,969,000

  Other (income) expense:
    Interest expense .................        3,411,000      3,184,000
    Interest income ..................       (1,607,000)    (5,261,000)
                                            -----------    -----------
  Income before income taxes..........       29,304,000     39,046,000

  Income taxes........................      (11,724,000)   (15,943,000)
                                            -----------    -----------
  Net income..........................     $ 17,580,000   $ 23,103,000
                                            ===========    ===========
  Weighted average shares
   outstanding - basic                       52,752,000     63,710,000
                                            ===========    ===========
  Net income per common share - basic.     $        .33   $        .36
                                            ===========    ===========
  Weighted average shares
   outstanding - diluted                     53,108,000     64,884,000
                                            ===========    ===========
  Net income per common share - diluted    $        .33   $        .36
                                            ===========    ===========

</TABLE>
<PAGE>
<TABLE>


  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  (Unaudited)

                                                Three Months Ended March 31,
                                                ----------------------------
                                                     1999          1998
                                                 ----------     ----------
  <S>                                           <C>            <C>
  Net income..........................          $17,580,000    $23,103,000
                                                 ----------     ----------
  Unrealized losses on securities, before tax      (622,000)    (1,240,000)
  Income tax benefit related to items of other
    comprehensive income..............              249,000        506,000
                                                 ----------     ----------
  Other comprehensive loss............             (373,000)      (734,000)
                                                 ----------     ----------
  Comprehensive income................          $17,207,000    $22,369,000
                                                 ==========     ===========

</TABLE>
<PAGE>
<TABLE>

  First Health Group Corp. and Subsidiaries
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Unaudited)

                                                Three Months Ended March 31,
                                                ----------------------------
                                                   1999           1998
                                                -----------    -----------
  <S>                                          <C>            <C>
  Cash flows from operating activities:
    Cash received from customers .........     $113,012,000   $121,307,000
    Cash paid to suppliers and employees .      (81,819,000)   (73,544,000)
    Healthcare benefits paid .............       (3,743,000)    (1,521,000)
    Interest income received .............        2,638,000      3,637,000
    Interest expense paid ................       (3,343,000)    (2,287,000)
    Income taxes paid, net ...............       (3,958,000)    (2,927,000)
                                                -----------    -----------
    Net cash provided by operating activities    22,787,000     44,665,000
                                                -----------    -----------
  Cash flows from investing activities:
    Purchases of investments .............      (32,386,000)  (109,366,000)
    Sales of investments .................       56,296,000     85,017,000
    Purchase of property and equipment ...      (12,213,000)   (14,382,000)
                                                -----------    -----------
    Net cash provided by (used in)
     investing activities..................      11,697,000    (38,731,000)
                                                -----------    -----------
  Cash flows from financing activities:
    Exercises of put options on common stock     (4,429,000)            --
    Purchase of treasury stock ...........      (63,090,000)   (50,376,000)
    Proceeds from issuance of common stock        1,096,000     17,748,000
    Proceeds from sale of put options on
     common stock                                   410,000             --
                                                -----------    -----------
    Net cash used in financing activities       (66,013,000)   (32,628,000)

  Net decrease in cash and cash equivalents     (31,529,000)   (26,694,000)
  Cash and cash equivalents, beginning
   of period                                     50,264,000     77,836,000
                                                -----------    -----------
  Cash and cash equivalents, end of period     $ 18,735,000   $ 51,142,000
                                                ===========    ===========
  Supplemental cash flow data:
    Non-cash financing activity:
      Treasury stock purchase payable ...      $    232,000   $         --
                                                ===========    ===========
</TABLE>
<PAGE>
<TABLE>

  First Health Group Corp. and Subsidiaries
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Unaudited)

                                               Three Months Ended March 31,
                                               ----------------------------
                                                    1999           1998
                                                -----------    -----------
  <S>                                          <C>            <C>
  Reconciliation of Net Income to Net Cash
   Provided by Operating Activities:

  Net Income...............................    $ 17,580,000   $ 23,103,000
                                                -----------    -----------
  Adjustments to Reconcile Net Income to Net
   Cash Provided by Operating Activities:

      Depreciation and amortization .......       7,046,000      5,926,000
      Change in provision for uncollectible
       receivables                                   25,000        (98,000)
      Tax benefit from stock options exercised           --      5,156,000
      Unrealized holding loss on marketable
       securities                                   240,000        388,000
      (Gain) loss on investment sales .....         759,000     (1,416,000)
      Other, net ..........................          55,000        (21,000)
      Changes in Assets and Liabilities:
      Accounts receivable .................      (5,462,000)    (9,938,000)
      Other current assets ................        (743,000)    (5,658,000)
      Reinsurance recoverable .............       2,508,000     57,227,000
      Accounts payable and accrued expenses      (7,747,000)    14,865,000
      Claims reserves .....................      (4,604,000)   (54,983,000)
      Income taxes payable ................       7,760,000     11,819,000
      Non-current assets and liabilities ..       5,370,000     (1,705,000)
                                                -----------    -----------
    Total adjustments .....................       5,207,000     21,562,000
                                                -----------    -----------

    Net cash provided by operating activities  $ 22,787,000   $ 44,665,000
                                                ===========    ===========
</TABLE>
<PAGE>



First Health Group Corp. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

  1.  The unaudited  financial statements  herein have  been prepared  by
      the  Company  pursuant  to   the  rules  and  regulations  of   the
      Securities  and Exchange  Commission.    The  accompanying  interim
      financial statements have been prepared under the  presumption that
      users of  the interim  financial information  have either  read  or
      have access  to the  audited financial  statements for  the  latest
      fiscal  year  ended  December  31,  1998.    Accordingly,  footnote
      disclosures  which would  substantially duplicate  the  disclosures
      contained in  the December  31, 1998  audited financial  statements
      have  been  omitted   from  these  interim  financial   statements.
      Certain information and  footnote disclosures normally included  in
      financial  statements   prepared  in   accordance  with   generally
      accepted  accounting principles  have  been  condensed  or  omitted
      pursuant  to such  rules and  regulations.   Although  the  Company
      believes that the disclosures are adequate to make  the information
      presented  not  misleading, it  is  suggested  that  these  interim
      financial  statements be  read in  conjunction with  the  financial
      statements and the notes  thereto included in the Company's  latest
      Annual Report on Form 10-K.

  2.  On May 19, 1998, the  Company's Board of Directors authorized a  2-
      for-1 Common Stock split in the form of a 100%  stock distribution.
      The distribution  was  made on  June 23,  1998 to  stockholders  of
      record on  June  2, 1998.   Historical  common share  amounts,  per
      share amounts and stock option data for all periods  presented have
      been restated to give effect to this 100% stock distribution.

  3.  The  Company's  investments  in  marketable  securities  which  are
      classified as  available  for sale  had a  net unrealized  loss  in
      market value  of $373,000, net  of deferred income  taxes, for  the
      three months ended March 31, 1999.   The net unrealized loss as  of
      March 31, 1999,  included as a  component of stockholders'  equity,
      was  $3,472,000  net  of  deferred  income  taxes.     The  Company
      liquidated  its $12,561,000  investment  in a  limited  partnership
      during 1998.   The  Company received proceeds  of $13,131,000  from
      the sale and expects to receive additional funds in 1999  after the
      completion of the audit of the partnership.  The Company  has three
      separate investments in  another limited partnership which  invests
      in  equipment  which  is  leased  to  third  parties.    The  total
      investment as of March 31, 1999 was $21.1 million and  is accounted
      for on the equity method since  the Company owns between a 20%  and
      25%   interest  in   each  particular   tranche  of   the   limited
      partnership.     The   Company's   proportionate   share   of   the
      partnership's  income  was $355,000  and  $225,000  for  the  three
      months  ended  March  31,  1999  and  1998,  respectively,  and  is
      included in interest income.
<PAGE>
  4.  The Company's Board of Directors has approved the repurchase  of up
      to 15  million shares  of the  Company's outstanding  common  stock
      under its current authorization.   Purchases may be made from  time
      to  time,  depending  on  market  conditions  and   other  relevant
      factors.   During  the  first three  months  of 1999,  the  Company
      repurchased  2,256,000  shares  for a total  cost  of approximately
      $38.3  million (of which  $232,000 was payable at March 31,  1999).
      Such  shares are recorded  as treasury shares, at  cost, and can be
      used for general corporate purposes.  The Company has approximately
      11.1 million shares available  for repurchase under its  repurchase
      authorizations as of March 31, 1999.

      In  connection  with  its  stock  repurchase  authorizations,   the
      Company has outstanding put options which obligate the  Company, at
      the election of the  option holders, to repurchase up to  3,250,000
      shares of common stock at prices ranging from $14.50 to  $15.50 per
      share.    The outstanding  put  options  expire  on  various  dates
      between June  30, 1999  and December 20,  1999.   During the  three
      months  ended March  31,  1999,  977,000  (of  the 2,256,000 shares
      that were repurchased) shares were put  to the Company  at  a total
      cost of $22,891,000. These shares were recorded as treasury shares,
      at cost,  in the  Company's  financial  statements.   In  addition,
      the  Company settled 573,000  puts by delivering $4,429,000 in cash
      to the option holders.

 5.  Weighted average  shares outstanding increased for diluted  earnings
     per  share by  356,000 and  1,174,000, respectively,  for the  three
     months  ended March 31,  1999 and 1998  due to the  effect of  stock
     options.   Diluted net income  per share was the  same as basic  net
     income per share for each of these periods.

 6.  Effective  January  1,  1998,  the  Company  adopted   Statement  of
     Financial  Accounting Standards  No. 130,  "Reporting  Comprehensive
     Income."   Comprehensive income is a  measurement of all changes  in
     stockholders'  equity  that  result  from  transactions   and  other
     economic events other than transactions with stockholders.   For the
     Company,  these changes consist of  changes in unrealized gains  and
     losses from its  investment portfolio.  This amount, net of  related
     taxes, is  presented as other comprehensive  income and is added  to
     net  income   resulting  in  total  comprehensive  income.     Other
     comprehensive  income was a  loss of $373,000  and $734,000 for  the
     three  months ended March  31, 1999 and  1998, respectively, net  of
     related taxes.   Total comprehensive income amounted to  $17,207,000
     and $22,369,000 for the three months ended March 31, 1999  and 1998,
     respectively.
<PAGE>
     In 1998, the Company also adopted Statement of  Financial Accounting
     Standards No. 131, "Disclosures About Segments of an  Enterprise and
     Related Information" ("SFAS  No. 131").  The Company has  determined
     it currently operates  in one reportable segment as defined by  SFAS
     No. 131.

     Effective  January  1,  1999,  the  Company  adopted   Statement  of
     Position 98-1, ("SOP  98-1"), "Accounting for the Costs of  Computer
     Software Developed or  Obtained for Internal Use."  The Company  now
     capitalizes  certain  internal  payroll and  payroll  related  costs
     during  the application  development stage  of a  software  project.
     The  effect of  adopting SOP  98-1 on  the Company's  first  quarter
     results  of operations and financial  position for the three  months
     ended March 31, 1999 was not material.

 7.  The  Company and  its  subsidiaries are  subject to  various  claims
     arising  in the  ordinary  course of  business  and are  parties  to
     various legal proceedings which constitute litigation  incidental to
     the business  of the Company and its  subsidiaries.  In the  opinion
     of  the  Company's  management,  only  one  matter   is  potentially
     material to the business or the financial condition of  the Company.
     On August 6,  1998, amended counterclaims were asserted against  the
     Company  in a lawsuit  pending in the  United States District  Court
     for the Northern District of Illinois.  The Company had  initiated a
     lawsuit against  United Payors and United  Providers ("UP & UP"),  a
     network of hospital  and other medical providers, on April 26,  1996
     asserting  claims for  trademark infringement and  state law  claims
     for  deceptive   trade  practices,  fraud  and  deceptive   business
     practices and for intentional interference with contracts.

     At  this time, the  Company alleges that  UP & UP  has employed  and
     continues  to employ false and  misleading statements and  practices
     concerning  the nature of  its own services  and relationships  with
     payor clients, as  well as the nature of the Company's services  and
     relationships with its payor clients, among other  related subjects.
     Specifically, the Company  alleges that UP & UP misled hospitals  to
     believe  that  the benefits  of  joining  UP &  UP's  network  would
     principally include the  likelihood of an increased market share  of
     patient  visits  by  mandatory commitments  from  UP  &  UP's  payor
     clients   to  implement  financial   incentives  and  to   otherwise
     influence  its clients' covered beneficiaries  to select a  provider
     in  UP & UP's  network.  The  Company further alleges  that UP &  UP
     representatives made  false representations claiming an  affiliation
     or  association  with the  Company's  own proprietary  network,  The
     AFFORDABLE Medical Networks.
<PAGE>
     In answering the  Company's lawsuit, UP & UP denied the  allegations
     and asserted defenses.  UP & UP also asserted  counterclaims seeking
     damages  for  alleged "false  advertising"  by the  Company,  unfair
     competition  and deceptive trade  practices, defamation,  commercial
     disparagement, and  seeking equitable cancellation of the  Company's
     service mark "AFFORDABLE."   Among other specific allegations, UP  &
     UP  alleges that various statements  made by the Company  concerning
     the acts of UP & UP, which are the subject of the  claims summarized
     above,  and a mailing  by the  Company attaching a  letter from  the
     Director of the  Office of Personnel Management in which UP & UP  is
     identified   as  a  "silent   or  non-directed  preferred   provider
     organization"   constitute   defamation  per   se   and   commercial
     disparagement and deceptive trade practices.

     The  Company  replied  to  UP  &  UP's  counterclaims   denying  the
     allegations,  and asserting defenses.   The action  at this time  is
     proceeding through the discovery phase.  The Company  is prosecuting
     and defending its  interests vigorously.  At this time, the  Company
     does  not  believe  that the  counterclaims  will  have  a  probable
     material  adverse  effect on  the  Company's financial  position  or
     future operating results.


<PAGE>
  First Health Group Corp. and Subsidiaries

  Item 2.
  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
  AND RESULTS OF OPERATIONS
  (Unaudited)


  Forward-Looking Information

    This Management's Discussion and Analysis of Financial  Condition and
  Results of Operations may  include certain forward-looking  statements,
  within the meaning  of Section 27A  of the Securities  Act of 1933,  as
  amended, and Section  21E of the  Securities Exchange Act  of 1934,  as
  amended, including  (without  limitation) statements  with  respect  to
  anticipated future  operating  and financial  performance,  growth  and
  acquisition opportunities and other similar forecasts and statements of
  expectation.    Words  such  as  "expects",  "anticipates",  "intends",
  "plans", "believes", "seeks", "estimates"  and "should" and  variations
  of these words and similar expressions, are intended to identify  these
  forward-looking statements.   Forward-looking  statements made  by  the
  Company and its management are based on estimates, projections, beliefs
  and assumptions of management  at the time of  such statements and  are
  not guarantees  of  future  performance.   The  Company  disclaims  any
  obligations to update or revise any forward-looking statement based  on
  the occurrence  of future  events, the  receipt of  new information  or
  otherwise.

    Actual   future  performance,   outcomes  and   results  may   differ
  materially from those expressed  in forward-looking statements made  by
  the Company  and its  management as  a  result of  a number  of  risks,
  uncertainties  and  assumptions.    Representative  examples  of  these
  factors include  (without  limitation) general  industry  and  economic
  conditions;  interest  rate  trends;   cost  of  capital  and   capital
  requirements;  competition  from  other  managed  care  companies;  the
  ability to expand the Company's group health, workers' compensation and
  risk businesses; shifts in customer  demands; the timely completion  of
  modifications to  ensure  that  the Company's  systems  are  Year  2000
  compliant; changes  in operating  expenses, including  employee  wages,
  benefits and medical inflation; governmental and public policy  changes
  and the continued availability of financing  in the amounts and at  the
  terms necessary to support the Company's future business.  In addition,
  if the Company  does not continue  to  successfully  integrate FHC  (as
  defined below) into its  existing business, successfully implement  new
  contracts and programs,  and control healthcare  benefit expenses,  the
  Company may not achieve its  planned 1999 financial results  (discussed
  below).
<PAGE>
  Recent Developments

    In  connection  with   the  acquisition  in  1997  of  FIRST   HEALTH
  Strategies, Inc. and  FIRST HEALTH  Services Corporation  (collectively
  "FHC"), the Company recorded  a charge to earnings  of $80 million  for
  purchased in-process research and  development which is not  deductible
  for income tax purposes.   In-process research and development  relates
  to the next generation of FHC's claims processing system software which
  had not yet reached the stage  of technological feasibility and had  no
  alternative future  use;  therefore, the  ultimate  revenue  generating
  capability  of  these  projects  was  uncertain.    The  research   and
  development  acquired  will  require  additional  development  efforts,
  estimated to cost  $15 million,  to become commercially  viable.   Such
  modifications include  the enhancement  of various  modules to  perform
  claims adjudication  reporting,  imaging and  correspondence,  and  are
  expected to be completed by the end of 1999.  Use of this technology is
  expected to ultimately decrease  claims processing costs  by up to  20%
  per claim.

    At the  date of acquisition, management  estimated the Company  would
  spend approximately $10 million in additional development  expenditures
  to make  the purchased  research and  development commercially  viable.
  The increase in development costs to $15 million is due to enhancements
  beyond those originally planned by the Company.


  Results of Operations

    Revenues  for  the  three  months  ended  March  31,  1999  decreased
  $10,397,000 (8%)  from  the  same period  last  year.    The  Company's
  revenues  consist  primarily  of  fees  for  cost  management  services
  provided under contracts on a percentage of savings basis (PPO and  fee
  schedule services)  or  on  a predetermined  contractual  basis.    The
  Company also derives revenues based on a fixed monthly charge for  each
  participant, excluding covered dependents, in a client-sponsored health
  care plan or on a per-transaction basis.  As a result of  the Company's
  insurance company acquisitions, revenues also include premium revenue.
<PAGE>
    The  following table  sets  forth  information with  respect  to  the
  sources of the Company's revenues for the three months ended March  31,
  1999 and 1998, respectively:

<TABLE>
                                              Sources of Revenue
                                               ($ in thousands)

                                         Three Months Ended March 31,
                                         ----------------------------
                                    1999          %      1998          %
                                   -------      ----    -------      ----
   <S>                            <C>           <C>    <C>           <C>
   Sources of Revenue:

     PPO Services                 $ 54,061       46%   $ 56,655       44%
     Claims Administration          43,004       37      47,244       37
     Clinical Management Services    8,737        7      11,200        9
     Fee Schedule Services           8,629        7       7,366        6
     Premiums, Net                   2,197        2       4,560        4
     Service                           733        1         733       --
                                   -------      ----    -------      ----
   Total Revenue                  $117,361      100%   $127,758      100%
                                   =======      ====    =======      ====

</TABLE>

    Revenue for the three  months ended March 31, 1999 decreased  8% from
  the same period of 1998 as the Company has lost a number of traditional
  First Health Strategies clients who utilized both claims administration
  services and  PPO services  (see "FHC  Acquisition Status")  and, to  a
  lesser extent,  some  traditional  HealthCare  COMPARE  clients.    The
  decrease reflects the  Company's focus on  larger multi-sited  national
  employers in  the  group health  area  which resulted  in  the  planned
  reduction in revenue for  accounts which did not  fit this niche.   PPO
  revenue for the three months ended March 31, 1999  decreased $2,594,000
  (5%) from the same period of 1998. The decrease in the first quarter is
  primarily due to a loss of business as discussed under "FHC Acquisition
  Status"   and   "The   Company's   Traditional   Business".      Claims
  administration revenue decreased $4,240,000  (9%) from the same  period
  last year  due  to  the  same  reasons.   Revenue  from  clinical  cost
  management services  decreased $2,463,000  (22%) for  the three  months
  ended March 31, 1999 from the comparable period in 1998.   The decrease
  in the first  quarter is  also due to  the loss  of business  mentioned
  above.  Revenue from fee  schedule services increased $1,263,000  (17%)
  from the comparable period in 1998  due primarily to new contracts  and
  expanded contract  activity with  several  existing clients.    Premium
  revenue decreased $2,363,000 (52%) for the three months ended March 31,
  1999 from the comparable period in  1998 due primarily to the  expected
  loss of  several clients  due to  price  increases implemented  by  the
  Company.
<PAGE>
    Cost  of services  decreased $1,117,000  (2%)  for the  three  months
  ended March  31, 1999  from the  comparable period  of 1998.   Cost  of
  services consists primarily of salaries and related costs for personnel
  involved in claims administration, PPO administration,  development and
  expansion, utilization management programs, fee schedule and other cost
  management and administrative services  offered by the  Company.  To  a
  lesser extent, cost of  services includes telephone expenses,  facility
  expenses and information  processing costs.   The decrease  in cost  of
  services for the three months ended March 31, 1999 is due  primarily to
  the cost  reduction  measures  the Company  has  initiated  during  the
  integration of the  FHC business.   These costs have  not decreased  as
  much as revenue  due primarily to  additional expenditures incurred  to
  remediate software for Year 2000  compliance in the Company's  Services
  business.

    Selling and  marketing costs  for the  three months  ended March  31,
  1999 decreased $1,095,000 (9%) from the comparable period of 1998.  The
  decrease in the first quarter is due primarily to the  consolidation of
  FHC sales activities into the traditional Company sales activities.

    General and  administrative costs  for the three  months ended  March
  31, 1999 decreased $1,600,000 (14%) from the comparable period of 1998.
  This decrease is primarily attributable to the elimination of duplicate
  functions within the Company subsequent to the acquisition of FHC.

    Healthcare benefits represent medical losses incurred  by insureds of
  the Company's insurance entities.  The loss ratio (losses as  a percent
  of premiums)  was  102% for  the  three  months ended  March  31,  1999
  compared to  90% for  the  comparable period  of  1998.   The  increase
  relates to medical losses incurred by the Company's stop loss insurance
  business.  A portion of these losses, however, related to claims runout
  for terminated clients.

    Depreciation  and amortization  expenses increased  $1,120,000  (19%)
  for the three months ended March 31, 1999 from the comparable period of
  1998 due primarily to purchases of computer hardware and software.

    Interest income for  the three months ended March 31,  1999 decreased
  $3,654,000 (69%) from the same period  in 1998 due to the 50%  decrease
  in cash equivalents  and investments since  March 31, 1998.   The  cash
  equivalents and investments  have decreased  primarily as  a result  of
  approximately $217 million in repurchases  of common stock since  March
  31, 1998.

    Interest  expense  increased  $227,000 (7%)  due  to  a  $25  million
  increase in  the amount  of outstanding  debt on  the revolving  credit
  agreement.  The interest rate, however, has remained between 5%  and 6%
  since the initial funding under the credit agreement.

    Net  income for  the three  months ended  March  31, 1999,  decreased
  $5,523,000 (24%) from the comparable period of 1998.  This  decrease is
  due primarily  to the  planned reductions  in revenue  the Company  has
  experienced as well  as expenses not  being reduced as  quickly as  the
  revenue declined.
<PAGE>
    Diluted net income  per common for the  three months ended March  31,
  1999 decreased 8%   to  $.33 per share  from the  comparable period  of
  1998.   The decrease  in  net income  per  common share  was  favorably
  impacted by the 2.3 million shares of Company common  stock repurchased
  and added to treasury during the  first three months of 1999.   For the
  three months ended  March 31, 1999,  diluted common shares  outstanding
  decreased 18% from the comparable period of 1998.

  Liquidity and Capital Resources

    The Company  had $16,719,000  in working  capital at  March 31,  1999
  compared with  working capital  of $15,409,000  at  December 31,  1998.
  Through the  first  three  months of  the  year,  operating  activities
  provided  $22,787,000  of   cash.     Investment  activities   provided
  $11,697,000  of  cash   representing  net  sales   of  investments   of
  $23,910,000 less purchases of fixed  assets of $12,213,000.   Financing
  activities  used   $66,013,000   of   cash   representing   $63,090,000
  ($25,000,000 which was  payable at December  31, 1998 for  transactions
  settled in 1999) in purchases of  treasury stock (of which  $40,431,000
  was purchased  on the  open market  with  the balance  being  purchased
  through the exercise of put options),  and exercises of put options  in
  cash of  $4,429,000 partially  offset by  $1,096,000  in proceeds  from
  issuance of common stock and $410,000 in sales of put options.

    On July 1,  1997, the Company entered  into a $200 million  revolving
  credit agreement  (the "Agreement")  to facilitate  the acquisition  of
  FHC.  In August, 1997, the Agreement was amended to  increase available
  borrowings to $350  million.  As  of March 31,  1999, $225 million  was
  outstanding under this facility.

    The   Company   believes  that   its   working   capital,   long-term
  investments, credit facility and cash generated from  future operations
  will be sufficient  to fund  the Company's  anticipated operations  and
  expansion plans.

  FHC Acquisition Status

    The  majority  of  the  integration  of  the   acquisition  has  been
  completed.  The Company focused FIRST HEALTH Strategies on the niche of
  serving multi-sited employers of 1,000 or more employees.  As  a result
  of this focus, the  Company has sold  several hundred client  contracts
  that do  not fit  into this  niche  which represent  approximately  $20
  million in  annual  revenue.   The  Company did  not  receive  material
  consideration for  this sale.    Additionally, the  Company  instituted
  significant price increases,  particularly for clients  that have  been
  paying fees at unacceptable profit levels.  These actions have resulted
  in the loss  of a significant  number of clients.   Management  expects
  these actions will result in increased efficiency of its operations.

  The Company's Traditional Business

    The  Company lost  some traditional  group  health business  in  1998
  particularly in the Federal Employee Health Benefit area.  However, the
  Company does not anticipate  the loss of  any meaningful business  from
  its traditional client base in 1999.
<PAGE>
  1999 Outlook

    Currently the Company  anticipates that its earnings per share  (EPS)
  in 1999 will be comparable to 1998 with an estimated decline in revenue
  between 5% and 10%  from 1998.  The  Company anticipates that its  PPO,
  Claims Administration, Clinical  Management and Risk  revenue will  all
  experience a decline from 1998.  The Company's Fee Schedule  revenue is
  expected to grow approximately 10% in 1999 as the workers' compensation
  business continues to  grow.   These revenue  fluctuations reflect  the
  Company's focus on larger multi-sited  national employers in the  group
  health area.  The Company anticipates that this strategy will result in
  accelerated growth in group health revenue in the later part of 1999.


  Year 2000 Matters

    General
    The  Company has  made significant  progress on  its company-wide  Year
    2000 ("Y2K") readiness project, and the project is currently on  target
    to have  the Company's  significant information  technology ("IT")  and
    non-IT systems  Y2K ready by the  end of 1999.   The Company defines  a
    significant system as one which, if not Y2K ready, may have a  material
    adverse  impact on  its  results of  operations,  revenues,  regulatory
    compliance or  relationships with customers,  vendors or  others.   The
    Company is  using both internal  and external  resources to  accomplish
    its Y2K project objectives.   The Company believes that significant  IT
    systems are either currently  Y2K ready, will be replaced with  systems
    designed to be Y2K ready, or retired by the end of 1999.  As a  service
    provider, the Company's  non-IT systems consist primarily of  equipment
    typically found  in commercial office  buildings including  electrical,
    fire alarm  and suppression, security, HVAC  and elevator systems,  and
    the Company  does not  anticipate any  material Y2K  problems with  the
    non-IT systems  within its control.   As part of  its Y2K project,  the
    Company is assessing,  and developing contingency plans to address  the
    most reasonably likely worst  case scenarios which may result from  the
    failure of a  significant Company or a  material third party system  to
    be Y2K ready.

    Y2K Project
    The Company  has instituted a corporate-wide  Y2K readiness project  to
    identify its IT and  non-IT systems which will require modification  or
    replacement and  to establish appropriate  remediation and  contingency
    plans to  avoid an impact  on its ability  to continue  to provide  its
    services.    Current  plans  call  for  any  necessary   modifications,
    replacements and  testing to support Year  2000 to be completed  before
    the  end of  1999, prior  to any  anticipated potential  impact on  the
    Company's  services and  operations.    The Company's  Y2K  project  is
    divided  into three  major  sections: 1)  IT  Software Systems,  2)  IT
    Hardware Systems and, 3) Non-IT  Systems.  For each major section,  the
    Company has implemented the following five-phase approach:
<PAGE>
    1. Inventory Phase.  Inventory of significant systems.

    2. Assessment Phase.   Assessment of the  vulnerability of  significant
    systems  to  the   Y2K  problem  and  development  of  correction   and
    contingency plans.

    3. Modification/Replacement Phase.   Modification  of  computer  source
    code,  and software,  hardware  and equipment  upgrade,  retirement  or
    replacement.

    4. Testing  and Validation  Phase.   Testing (both  internally and with
    third parties)  of all modified,  upgraded or  replaced components  and
    interfaces.

    5. Implementation Phase.  Modified, upgraded or replaced components are
    put into operation.

      The following chart graphically depicts the approximate current state
    of completion for each phase:

<TABLE>

   -----------------------------------------------------------------------
             Inventory   Assessment   Modification    Testing    Implement-
               Phase       Phase           or           and        ation
                                       Replacement  Validation     Phase
                                          Phase        Phase
   -----------------------------------------------------------------------
   <S>         <C>         <C>             <C>          <C>          <C>
   IT          100%        100%            95%          70%          50%
   Software
   Systems
   -----------------------------------------------------------------------
   IT          100%        100%            90%          90%          90%
   Hardware
   Systems
   -----------------------------------------------------------------------
   Non-IT      100%         98%            95%          80%          90%
   Systems
   -----------------------------------------------------------------------

</TABLE>

    IT Software Systems
    The Company's  IT software systems  are comprised  of both  proprietary
    and commercial third party software applications which can generally be
    divided  into three  categories: 1)  database  systems,  2) operational
    systems, and 3) claims administration systems.
<PAGE>
    Database  Systems.   As  part of  its  ongoing efforts  to  update  and
    enhance  its IT  resources,  the  majority of  The  Company's  database
    systems currently  utilize four digits  to represent the  year in  date
    data (i.e., 02/02/1998).  Consequently, nearly all database IT  systems
    presently being  used by the  Company were created  with the change  of
    millennium in  mind and no  further modifications are  necessary.   The
    testing and validation phases are  expected to be completed by the  end
    of  the third  quarter of  1999.   Concurrent  with the  completion  of
    testing  and  validation,  the  remediated  database  systems  will  be
    implemented.

    Operational  Systems.    The  Company  has  received  assurances   from
    approximately 85%  of the third party  vendors that their  applications
    are currently Y2K  ready.  For those applications  that may have a  Y2K
    problem,  The Company  is assessing  whether it  will modify,  upgrade,
    replace or  retire such applications.   Also included in this  category
    are several proprietary Company applications:

    MCPS.   This  application  is used  to  reprice medical  bills  to  the
    negotiated  PPO contract  rates with  providers  in The  First  HealthR
    Network.   MCPS  is in  the testing  and validation  phase, and  it  is
    expected to be implemented during the second quarter of 1999.

    PINS.  This application is used to maintain demographic information  on
    providers in  The First Health [R]  Network.    Modifications  to  this
    application are expected  to be completed  during the second quarter of
    1999,  and  the  testing,  validation  and  implementation  phases  are
    expected to be completed during the third quarter of 1999.

    IMPaCT.   This application is used  to provide medical review  services
    to clients.  IMPaCT is in  the testing and validation phase, and it  is
    expected to be implemented during the third quarter of 1999.

    CHE.  The Company is currently  assessing the need to modify data  feed
    formats  into  and  out  of  its  centrally  housed  eligibility  (che)
    application.   Modification,  testing,  validation  and  implementation
    phases  are  expected to be completed during the third quarter of 1999.

    Claims  Administration Systems.    The  Company utilizes  a  number  of
    different systems  to process health benefits  claims for its  clients.
    The  Company completed  the modification  and  testing on  its  primary
    group health medical claims processing  system - the ACT System -  well
    ahead  of  schedule,  and  the  Y2K-ready  ACT  System  was  placed  in
    operation  in  mid-April.   The  ACT  System  uses  the  4-digit  year,
    including the century, for  all internal codes.  A windowing  technique
    is  used for  external interfaces  that are  not yet  Y2K ready.    The
    Company  is also  communicating with  clients and  other third  parties
    which interface  with this system  to establish  schedules for  testing
    and validation.

    The Company  also licenses medical  claims administration systems  from
    third party  vendors, which are  used primarily to  process claims  for
    specific clients.   The Company  has received  written assurances  that
    these systems are designed and  programmed with the Year 2000 in  mind,
    and that  all updates and  changes to the  system continue  to be  Year
    2000 compliant.  These systems include the Company's FirstClaim  system
    used to  process claims for its  ConfidentCare clients, and its  ERISCO
    system.
<PAGE>
    To process  pharmacy claims for clients, The Company  utilizes Company-
    owned  proprietary  systems.    Utilizing  both  internal  and external
    resources,  modification  of the  source  code  for  these  systems  is
    continuing  and  the  modifications  and  testing  are  expected to  be
    completed during the third quarter of 1999.

    The Company utilizes customized Medicaid claims processing systems  for
    its  government (Medicaid)  contracts.   Utilizing  both  internal  and
    external services, modification of the source code for the majority  of
    these  systems is  complete  and the  remainder  are on  target  to  be
    completed during  the third quarter of  1999.  The testing,  validation
    and implementation phases are being conducted consistent with the  time
    frames required  in Company contracts  with the  respective states  and
    are expected to be completed during the third quarter of 1999.

    Additionally,  the  Company  has  an  agreement  with  Electronic  Data
    Systems  ("EDS")  for access  to  certain  EDS systems  to  enable  the
    Company  and  EDS   to  provide  certain  workers'  compensation   bill
    repricing  services to  Company  clients.   The  Company  has  received
    assurances from  EDS that it is  taking appropriate measures to  ensure
    its systems will not be interrupted by a Y2K problem.  The Company  and
    EDS have completed  internal modifications and testing and are  working
    together to establish   testing and validation schedules with  clients.
    The testing,  validation and implementation phases  are expected to  be
    completed during the second quarter of 1999.

    IT Hardware Systems
    The Company has completed  the inventory and assessment phases for  its
    IT hardware systems.   The testing phase is  on target to be  completed
    by the end of the second  quarter of 1999.  The majority of the  effort
    in  the implementation  phase  relates to  an  upgrade of  the  desktop
    environment,  a process  which is  approximately  90% complete  and  on
    target to be completed by the end of the third quarter of 1999.

    Non-IT Systems
    The  Company's  non-IT  systems  are  primarily  comprised  of  systems
    typically found in  commercial office buildings including,  electrical,
    fire alarm and suppression,  security, HVAC and elevator systems.   The
    inventory and assessment phases for non-IT systems are almost  complete
    with only a few small office sites remaining.  The Company is on target
    to complete its modification, replacement and testing phases during the
    third  quarter  of  1999.    The  Company  has  also  received  written
    assurances  from the  vast  majority  of its  significant  vendors  and
    suppliers that  the Y2K problem  will not  materially adversely  effect
    their  ability  to  continue  to  provide  supplies  or  services,  and
    continues to seek written  assurances from the remainder.  The  Company
    utilizes   systems   from   Lucent   and   Nortel   for   its   primary
    telecommunication  systems  and  has  received  assurances  that  these
    systems are  Y2K-ready.  Additionally,  the majority  of the  Company's
    communication traffic  is carried by  AT&T and Sprint  and the  Company
    has received assurances that their systems are Y2K-ready.  The  Company
    also continues  to evaluate responses  from owners/landlords of  office
    spaces which the Company leases and from significant  vendors/suppliers
    to determine  their Year 2000  readiness.  To  date, no responses  have
    indicated that  any facilities or  vendors/suppliers will  have a  Year
    2000  problem  which  would have  a  material  adverse  effect  on  the
    Company.
<PAGE>
    Costs
    The Company estimates  the total cost of  its Y2K readiness project  to
    be approximately  $16,000,000 which  will be  funded through  operating
    cash flows.   Of the  total project cost,  approximately $6,000,000  is
    attributable to  the purchase of new  hardware and software which  will
    be capitalized.  The  remaining $10,000,000, which will be expensed  as
    incurred, is not expected to have  a material effect on the results  of
    operations.    As  of   March  31,  1999,  the  Company  has   incurred
    approximately  $12,000,000  (75%) of  its  total  estimated  Year  2000
    costs.  The  Company expects to receive  reimbursement of at least  40%
    of the costs  directly from a number of its  clients due to the  nature
    of  the  contractual  arrangements with  these  entities.    Year  2000
    remediation costs  represent approximately 15%  of the Company's  total
    IT  budget and  no material  projects  have been  deferred due  to  the
    Company's Year 2000 efforts.

    Contingency Plans
    The  Company's IT  systems  interface with  numerous  clients,  medical
    service providers  and regulatory agencies,  and failure  to correct  a
    material   Y2K  problem   could  interrupt   business  activities   and
    operations and  materially adversely  affect the  Company's results  of
    operations,  revenues,  regulatory  compliance  or  relationships  with
    customers, vendors or  others.  Not only  must the Company ensure  that
    its  own  IT and  non-IT  systems  are Y2K  ready,  but  it  also  must
    ascertain  that the  systems of  third parties  with whom  the  Company
    interfaces  are both  Y2K ready  and that  their solutions  to the  Y2K
    problem  are compatible  with those  of the  Company.   As the  Company
    assesses the  Y2K readiness of its  IT and non-IT systems,  contingency
    plans are  also being developed to  address the most reasonably  likely
    worst  case  scenarios  which   may  result  from  the  failure  of   a
    significant Company  or material third  party system to  be Y2K  ready.
    Contingency plans  will continue to  be modified and  developed as  the
    Company progresses in its Y2K readiness project.


  New Accounting Pronouncements

    In  June  1998,   the  Financial  Accounting  Standards  Board   issued
  Statement of  Financial Accounting  Standards  No. 133,  "Accounting  for
  Derivative Instruments and  Hedging Activities" ("SFAS  No. 133").   SFAS
  No. 133  requires that  all derivative  instruments be  measured at  fair
  value.   This  statement also  requires  changes  in the  fair  value  of
  derivatives  to  be   recorded  each  period   in  current  earnings   or
  comprehensive income depending  on the intended  use of the  derivatives.
  This statement  is effective  for all  fiscal  quarters of  fiscal  years
  beginning after June 15,  1999.  The Company  has not yet determined  the
  impact of  SFAS  No. 133  on  its  results of  operations  and  financial
  position.

  Item 3.  Quantitative  and  Qualitative  Disclosures

  About Market Risk

       The Company's market risk exposure at March 31, 1999 is consistent
  with the types of market risk  and amount of exposure presented in  its
  1998 Annual Report on Form 10-K.

<PAGE>

  PART II



  Item 6. Exhibits and Reports on Form 8-K

          Exhibits:

            (a) Exhibit 11 - Computation of Basic Earnings Per Common Share

            (b) Exhibit 11 - Computation of Diluted Earnings Per Common Share

          Reports on Form 8-K:

            The Company filed a Report on Form 8-K dated March 19, 1999
             reporting under Item 5, the adoption of a Shareholder Rights
             Agreement.



<PAGE>
                           SIGNATURES


  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.


                           First Health Group Corp.

  Dated:  May 10, 1999        /s/James C. Smith
                                -----------------
                                James C. Smith
                                President and Chief Executive Officer


  Dated:  May 10, 1999        /s/Joseph E. Whitters
                                ---------------------
                                Joseph E. Whitters
                                Chief Financial Officer
                                (Principal Financial and Accounting Officer)