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 September 30, 2000
                                   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) 737-7900
           --------------------------------------------------
            (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 November 8, 2000, was 47,611,083.

<PAGE>

             First Health Group Corp. and Subsidiaries

                               INDEX


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

       Consolidated Balance Sheets - Assets at September 30, 2000
         and December 31, 1999                                       3

       Consolidated Balance Sheets - Liabilities and Stockholders'
         Equity at September 30, 2000 and December 31, 1999          4

       Consolidated Statements of Operations for the three months
         ended September 30, 2000 and 1999                           5

       Consolidated Statements of Operations for the nine months
         ended September 30, 2000 and 1999                           6

       Consolidated Statements of Comprehensive Income for the
         three months ended September 30, 2000 and 1999              7

       Consolidated Statements of Comprehensive Income for the
         nine months ended September 30, 2000 and 1999               7

       Consolidated Statements of Cash Flows for the nine months
         ended September 30, 2000 and 1999                          8-9

       Notes to Consolidated Financial Statements                  10-11

       Item 2.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations                12-17

       Item 3.  Quantitative and Qualitative Disclosures About
                Market Risk                                          18

 Part II.  Other Information

       Item 6.  Exhibits and Reports on Form 8-K                     19


 Signatures                                                          20

<PAGE>
 PART 1.  Financial Information

<TABLE>
 First Health Group Corp. and Subsidiaries
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
---------------------------------------------------------------------------

 ASSETS                                 September 30, 2000  December 31, 1999
                                             -----------     -----------
<S>                                         <C>             <C>
 Current Assets:
   Cash and cash equivalents                $ 24,825,000    $ 35,639,000
   Short-term investments                      1,322,000          78,000
   Accounts receivable, less allowances
     for doubtful accounts of $10,759,000
     and $10,844,000, respectively            62,807,000      59,482,000
   Deferred income taxes                      14,925,000      14,925,000
   Other current assets                       15,264,000      10,609,000
                                             -----------     -----------
   Total current assets                      119,143,000     120,733,000

 Long-Term Investments:
   Marketable securities                      60,739,000      61,037,000
   Other                                      41,108,000      31,842,000
                                             -----------     -----------
                                             101,847,000      92,879,000
                                             -----------     -----------
 Property and Equipment:
   Land, buildings and improvements           67,534,000      64,765,000
   Computer equipment and software           158,563,000     124,614,000
   Office furniture and equipment             16,468,000      14,235,000
                                             -----------     -----------
                                             242,565,000     203,614,000
   Less accumulated depreciation and
      amortization                          (101,180,000)    (75,602,000)
                                             -----------     -----------
   Net property and equipment                141,385,000     128,012,000
                                             -----------     -----------
 Goodwill, less accumulated amortization
   of $11,488,000, and $8,701,000,
   respectively                               90,842,000      93,629,000
 Reinsurance recoverable                      32,637,000      50,810,000

 Other Assets                                  1,982,000       2,671,000
                                             -----------     -----------
                                            $487,836,000    $488,734,000
                                             ===========     ===========

                See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>

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

 LIABILITIES AND STOCKHOLDERS' EQUITY

                                        September 30, 2000  December 31, 1999
                                             -----------     -----------
<S>                                         <C>             <C>
 Current Liabilities:
   Accounts payable                         $ 27,047,000    $ 28,307,000
   Accrued expenses                           30,249,000      27,680,000
   Income taxes payable                        5,617,000       1,493,000
   Claims reserves                            15,065,000      10,628,000
                                             -----------     -----------
   Total current liabilities                  77,978,000      68,108,000

 Long-Term Debt                              177,500,000     240,000,000
 Claims Reserves - Non-Current                32,637,000      50,810,000
 Deferred Taxes                               40,970,000      20,306,000
 Other Non-Current Liabilities                21,900,000      22,778,000
                                             -----------     -----------
   Total liabilities                         350,985,000     402,002,000
                                             -----------     -----------
 Commitments and Contingencies                        --              --

 Stockholders' Equity:
   Common stock                                  787,000         770,000
   Additional paid-in capital                230,692,000     189,383,000
   Retained earnings                         514,338,000     453,440,000
   Stock option loan receivable              ( 2,825,000)     (2,859,000)
   Accumulated comprehensive loss             (1,748,000)     (4,401,000)
   Treasury stock, at cost                  (604,393,000)   (549,601,000)
                                             -----------     -----------
   Total stockholders' equity                136,851,000      86,732,000
                                             -----------     -----------
                                            $487,836,000    $488,734,000
                                             ===========     ===========

                See Notes to Consolidated Financial Statements

</TABLE>
<PAGE>
<TABLE>

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

                                         Three Months Ended September 30,
                                                 2000             1999
                                               -----------    -----------
 <S>                                          <C>            <C>
 Revenues                                     $128,065,000   $113,421,000
                                               -----------    -----------
 Operating expenses:
   Cost of services                             56,846,000     53,173,000
   Selling and marketing                        12,359,000     11,252,000
   General and administrative                    8,530,000      8,959,000
   Healthcare benefits                           3,412,000      1,087,000
   Depreciation and amortization                 9,878,000      7,395,000
                                               -----------    -----------
                                                91,025,000     81,866,000
                                               -----------    -----------

 Income from operations                         37,040,000     31,555,000

 Other (income) expense:
   Interest expense                              3,627,000      3,944,000
   Interest income                              (1,466,000)    (1,546,000)
                                               -----------    -----------
 Income before income taxes                     34,879,000     29,157,000

 Income taxes                                  (14,126,000)   (12,008,000)
                                               -----------    -----------
 Net income                                   $ 20,753,000   $ 17,149,000
                                               ===========    ===========

 Weighted average shares outstanding - basic    47,894,000     49,599,000
                                               ===========    ===========
 Net income per common share - basic          $        .43   $        .35
                                               ===========    ===========
 Weighted average shares outstanding - diluted  49,875,000     50,388,000
                                               ===========    ===========
 Net income per common share - diluted        $        .42   $        .34
                                               ===========    ===========

                See Notes to Consolidated Financial Statements

</TABLE>
<PAGE>
<TABLE>

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

                                            Nine Months Ended September 30,
                                                   2000            1999
                                               -----------    -----------
<S>                                           <C>            <C>
 Revenues                                     $376,424,000   $346,212,000
                                               -----------    -----------
 Operating expenses:
   Cost of services                            168,245,000    163,401,000
   Selling and marketing                        35,746,000     34,444,000
   General and administrative                   25,765,000     27,831,000
   Healthcare benefits                           9,145,000      6,082,000
   Depreciation and amortization                28,365,000     21,743,000
                                               -----------    -----------
                                               267,266,000    253,501,000
                                               -----------    -----------

 Income from operations                        109,158,000     92,711,000

 Other (income) expense:
   Interest expense                             11,672,000     10,939,000
   Interest income                              (4,864,000)    (4,962,000)
                                               -----------    -----------
 Income before income taxes                    102,350,000     86,734,000

 Income taxes                                  (41,452,000)   (35,055,000)
                                               -----------    -----------
 Net income                                   $ 60,898,000   $ 51,679,000
                                               ===========    ===========

 Weighted average shares outstanding - basic    47,828,000     50,995,000
                                               ===========    ===========
 Net income per common share - basic          $       1.27   $       1.01
                                               ===========    ===========
 Weighted average shares outstanding - diluted  49,755,000     51,529,000
                                               ===========    ===========
 Net income per common share - diluted        $       1.22   $       1.00
                                               ===========    ===========

                See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>

First Health Group Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
---------------------------------------------------------------------------
                                            Three Months Ended September 30,
                                              ---------------------------
                                                  2000           1999
                                               ----------     ----------
<S>                                           <C>            <C>
 Net income                                   $20,753,000    $17,149,000
                                               ----------     ----------
 Unrealized gains (losses) on securities,
   before tax                                   1,810,000        (95,000)
 Income tax (expense) benefit related to
   items of other comprehensive income           (750,000)        39,000
                                               ----------     ----------
 Other comprehensive income (loss)              1,060,000        (56,000)
                                               ----------     ----------
 Comprehensive income                         $21,813,000    $17,093,000
                                               ==========     ==========



                                            Nine Months Ended September 30,
                                               -------------------------
                                                  2000           1999
                                               ----------     ----------
<S>                                           <C>            <C>
 Net income                                   $60,898,000    $51,679,000
                                               ----------     ----------
 Unrealized gains (losses) on securities,
   before tax                                   4,454,000       (834,000)
 Income tax (expense) benefit related to
   items of other comprehensive income         (1,801,000)       337,000
                                               ----------     ----------
 Other comprehensive income (loss)              2,653,000       (497,000)
                                               ----------     ----------
 Comprehensive income                         $63,551,000    $51,182,000
                                               ==========     ==========


                See Notes to Consolidated Financial Statement

</TABLE>
<PAGE>
<TABLE>

 First Health Group Corp. and Subsidiaries
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
---------------------------------------------------------------------------
                                              Nine Months Ended September 30,
                                                 -------------------------
                                                  2000           1999
                                                -----------    -----------
<S>                                            <C>            <C>
 Cash flows from operating activities:
   Cash received from customers                $374,425,000   $351,732,000
   Cash paid to suppliers and employees        (234,577,000)  (233,675,000)
   Healthcare benefits paid                      (4,363,000)    (8,498,000)
   Interest income received                       3,872,000      5,449,000
   Interest expense paid                        (11,339,000)   (10,733,000)
   Income taxes paid, net                       (10,529,000)   (27,866,000)
                                                -----------    -----------
   Net cash provided by operating activities    117,489,000     76,409,000
                                                -----------    -----------
 Cash flows from investing activities:
   Purchases of investments                     (19,629,000)   (60,522,000)
   Sales of investments                          14,605,000    102,053,000
   Purchase of property and equipment           (38,952,000)   (37,182,000)
                                                -----------    -----------
   Net cash provided by (used in)
     investing activities                       (43,976,000)     4,349,000
                                                -----------    -----------
 Cash flows from financing activities:
   Exercises of put options on common stock              --     (4,429,000)
   Purchase of treasury stock                   (46,059,000)   (99,773,000)
   Repayment of long-term debt                  (87,500,000)   (15,000,000)
   Proceeds from issuance of long-term debt      25,000,000     10,000,000
   Stock option loans to employees               (3,637,000)    (2,859,000)
   Stock option loan repayments                   3,671,000             --
   Proceeds from issuance of common stock        23,818,000      4,217,000
   Proceeds from sale of put options
      on common stock                               380,000      3,256,000
                                                -----------    -----------
   Net cash used in financing activities        (84,327,000)  (104,588,000)
                                                -----------    -----------
 Net decrease in cash and cash equivalents      (10,814,000)   (23,830,000)
 Cash and cash equivalents, beginning of period  35,639,000     50,264,000
                                                -----------    -----------
 Cash and cash equivalents, end of period      $ 24,825,000   $ 26,434,000
                                                ===========    ===========
 Non-cash financing activity:
   Stock options exercised in exchange
     for common stock                          $  8,733,00    $         --
                                                ===========    ===========
   Treasury stock purchase payable             $        --    $ 22,575,000
                                                ===========    ===========

                See Notes to Consolidated Financial Statements

</TABLE>
<PAGE>
<TABLE>

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

                                              Nine Months Ended September 30,
                                                 -------------------------
                                                  2000           1999
                                                -----------    -----------
 <S>                                           <C>            <C>
 Reconciliation of Net Income to Net Cash
   Provided by Operating Activities:

 Net Income                                    $ 60,898,000   $ 51,679,000
                                                -----------    -----------
 Adjustments to Reconcile Net Income to Net
   Cash Provided by Operating Activities:

     Depreciation and amortization               28,365,000     21,743,000
     Change in provision for uncollectible
       receivables                                  (85,000)       (84,000)
     Tax benefit from stock options exercised     8,395,000        670,000
     Unrealized holding (gain) loss on
       marketable securities                     (1,801,000)       235,000
     Loss on investment sales                       440,000        880,000
     Deferred income taxes                       20,664,000             --
     Other, net                                  (1,173,000)       184,000

     Changes in Assets and Liabilities:

     Accounts receivable                         (3,240,000)     2,757,000
     Other current assets                        (4,655,000)      (284,000)
     Reinsurance recoverable                     18,173,000      5,271,000
     Accounts payable and accrued expenses        1,309,000    (10,939,000)
     Claims reserves                            (13,736,000)    (8,972,000)
     Income taxes payable                         4,124,000      6,514,000
     Non-current assets and liabilities            (189,000)     6,755,000
                                                -----------    -----------
   Total adjustments                             56,591,000     24,730,000
                                                -----------    -----------
   Net cash provided by operating activities   $117,489,000   $ 76,409,000
                                                ===========    ===========

                See Notes to Consolidated Financial Statements
</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,
    1999.    Accordingly,  footnote  disclosures which  would  substantially
    duplicate  the disclosures  contained in the  December 31,  1999 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. The Company's investments  in marketable securities which are classified
    as  available for  sale had  a net  unrealized gain  in market  value of
    $2,653,000,  net of  deferred income  taxes, for  the nine  months ended
    September 30,  2000.  The net unrealized loss  as of September 30, 2000,
    included as a  component of stockholders' equity, was $1,748,000, net of
    deferred income  taxes.  The Company has five  separate investments in a
    limited partnership which  invests in equipment which is leased to third
    parties.   The  total  investment as  of  September 30,  2000  was $35.1
    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 $1,617,000 and $1,036,000 for  the nine months
    ended  September 30,  2000 and  1999, respectively,  and is  included in
    interest income.

 3. 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 nine months  of 2000, the Company repurchased 1,705,000 shares for
    a total cost of  approximately $46 million.  Such shares are recorded as
    treasury  shares,  at  cost,  and  can  be used  for  general  corporate
    purposes.   As of September  30, 2000, approximately  5.2 million shares
    remain available for  repurchase under the Company's current  repurchase
    authorization.  In connection  with  its stock  repurchase  program, the
    Company has  outstanding put options which obligate the  Company, at the
    election  of the option holders,  to repurchase up to  500,000 shares of
    common stock at a price of $28.00.

 4. Weighted average  shares outstanding increased for  diluted earnings per
    share   by  1,981,000  and   1,927,000  and  by   789,000  and  534,000,
    respectively,  for the three  and nine  months ended September  30, 2000
    and 1999  due to the effect  of stock options outstanding.   Diluted net
    income per share was $.01  and $.05 less than basic net income per share
    for the three  and nine months ended September 30,  2000 also due to the
    effect of  stock options outstanding.  Diluted net  income per share was
    $.01 less than basic net  income per share for the three and nine months
    ended September 30, 1999 due to the effect of stock options.
<PAGE>

 5. Effective  January 1,  1999, the Company  adopted Statement  of Position
    98-1,  "Accounting  for  the Costs  of  Computer  Software Developed  or
    Obtained  for  Internal  Use."    The Company  now  capitalizes  certain
    internal payroll related  costs during the application development stage
    of  a  software project.    The Company  capitalized  approximately $3.8
    million  and $3.9  million during  the nine  months ended  September 30,
    2000 and 1999, respectively, that would have previously been expensed.

    In June  1998, the Financial Accounting Standards Board  issued SFAS No.
    133,  "Accounting For  Derivative Instruments  and  Hedging Activities".
    SFAS No.  133 requires that all derivative instruments  be recognized as
    either  assets or liabilities in  the balance sheet  and that 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 the  Company
    beginning  January 1, 2001.   The Company  has prepared an  inventory of
    derivatives as defined by  SFAS No. 133 and has determined that SFAS No.
    133  will not have  a material effect  on its results  of operations and
    financial position.

 6. 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 has  the potential  to be  material to  the
    business or  the financial condition of the Company.   At this time,  the
    Company  does not believe  that the claim  will have  a material  adverse
    effect on  the Company's business or  financial condition. In July  2000,
    the  District of Columbia  Office of Inspector  General ("OIG") issued  a
    report  evaluating the District of  Columbia's ("the District")  Medicaid
    program  and  suggesting ways  to  improve  the program.    First  Health
    Services Corporation ("Services"),  a subsidiary of the Company that  was
    acquired  in  July  1997,  has  acted  as  the  program's  fiscal   agent
    intermediary  for 20  years.  The  OIG report  included allegations  that
    from  1993 to 1996 Services,  in its role  as fiscal agent  intermediary,
    made erroneous  Medicaid payments to providers  on behalf of patients  no
    longer eligible to receive Medicaid benefits.

    The  Company  disagrees with  the  OIG's allegations  concerning  payment
    errors  for  several  reasons,  including  the  following:  (1)  a  large
    percentage  of the  payments identified  by the  OIG were  the result  of
    eligibility  determinations made after (sometimes  long after) the  claim
    was paid;  and (2) a large percentage of  the payments identified by  OIG
    were  payments  made  in  situations  in  which  historical   eligibility
    information  was unavailable  due to  the limitations  of the  District's
    system on  which eligibility information is  stored.  Moreover, when  the
    issue of potential overpayments was first raised with District  officials
    in  1996,  (prior to  the  Company's acquisition  of  Services)  Services
    recommended that  efforts be undertaken to  recover any payments made  to
    providers  on behalf of ineligible  participants, but Services was  never
    authorized by the District to take any action in this regard.

    Services  and  the  Company  are  cooperating  with  the  OIG's   ongoing
    investigation and will defend their interests vigorously.  At this  time,
    the  Company also  believes that  the claim  related to  the District  of
    Columbia Medicaid program will not have a material adverse effect on  the
    Company's  financial   condition  due  to  indemnification   arrangements
    entered into with the previous owner of Services.
<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", "could"
 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; 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  implement new contracts  and programs and  control
 healthcare benefit expenses, the Company may not achieve its projected  2000
 and 2001 financial results (discussed below).

 Results of Operations

      The Company's revenues  consist primarily of  fees for cost  management
 services provided under contracts on a percentage of savings basis (PPO)  or
 on a predetermined contractual  basis (claims administration, fee  schedule,
 pharmacy benefit management and clinical management services).  As a  result
 of the  Company's  insurance  company acquisitions,  revenues  also  include
 premium revenue.
<PAGE>

<TABLE>
      The following table sets forth information with respect to the  sources
 of the  Company's  revenues for  the  three  months and  nine  months  ended
 September 30, 2000 and 1999, respectively:

                                              Sources of Revenue
                                               ($ in thousands)

                                        Three Months Ended September 30,
                                          ---------------------------
                                           2000     %       1999     %
                                         -------  ----   -------  ----
      <S>                               <C>       <C>   <C>       <C>
      Sources of Revenue:

        PPO Services                    $ 68,778   54%  $ 56,723   50%
        Claims Administration             38,100   30     37,586   33
        Clinical Management Services       8,460    7      8,623    8
        Fee Schedule Services              9,288    7      8,029    7
        Premiums, Net                      3,270    2      1,787    1
        Service                              169   --        673    1
                                         -------  ----   -------  ----
      Total Revenue                     $128,065  100%  $113,421  100%
                                         =======  ====   =======  ====

                                                Sources of Revenue
                                                 ($ in thousands)

                                        Nine Months Ended September 30,
                                         -----------------------------
                                           2000      %      1999     %
                                         -------  ----   -------  ----
      <S>                               <C>       <C>   <C>       <C>
      Sources of Revenue:

        PPO Services                    $201,378   54%  $166,753   48%
        Claims Administration            113,026   30    120,380   35
        Clinical Management Services      24,291    6     26,053    7
        Fee Schedule Services             27,989    7     25,204    7
        Premiums, Net                      8,892    3      5,744    2
        Service                              848   --      2,078    1
                                         -------  ----   -------  ----
      Total Revenue                     $376,424  100%  $346,212  100%
                                         =======  ====   =======  ====
</TABLE>
<PAGE>
      Revenue for  the  three  months  and  nine  ended  September  30,  2000
 increased $14,644,000  (13%) and  $30,212,000 (9%),  respectively, from  the
 same periods of 1999 due to strong growth in PPO revenue which increased 21%
 from the third quarter of 1999 representing the largest percentage  increase
 since the first quarter of 1995.  The increase in PPO revenue for the  three
 and nine months  ended September  30, 2000 is  due primarily  to new  client
 additions.   Claims  administration  revenue  for  the  three  months  ended
 September 30, 2000 increased $514,000 (1%) from the same period in 1999  due
 to  the  addition of new  business particularly in  the public sector  area.
 Claims administration revenue for the nine  months ended September 30,  2000
 decreased $7,354,000  (6%)  from  the  same period  last  year  due  to  the
 continued implementation of  the Company's  strategy of  focusing on  larger
 multi-sited  national  employers  in  the   group  health  area  (see   "FHC
 Acquisition Status").  Similarly, revenue from clinical management  services
 decreased $163,000 (2%) and $1,762,000 (7%)  from the comparable periods  in
 1999 due primarily to the loss of business discussed under "FHC  Acquisition
 Status".  Revenue from fee schedule services increased $1,259,000 (16%)  and
 $2,785,000 (11%)  from  the comparable  periods  of 1999  due  primarily  to
 expanded contract activity from several  existing clients.  Premium  revenue
 increased $1,483,000  (83%) and  $3,148,000 (55%)  for  the three  and  nine
 months ended September 30,  2000 due primarily to  the addition of new  stop
 loss insurance  clients.   Risk-related service  revenue decreased  $504,000
 (75%) and $1,230,000 (59%)  from the comparable periods  of 1999 due to  the
 planned termination of unprofitable business.

      Cost of services increased $3,673,000 (7%) and $4,844,000 (3%) for  the
 three months and nine  months ended September  30, 2000, respectively,  from
 the comparable periods  in 1999.   Cost  of services  consists primarily  of
 salaries and related costs for personnel involved in claims  administration,
 PPO administration, development and expansion, clinical management programs,
 fee schedule,  pharmacy benefit  management 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.  As a percentage of revenue, cost of services decreased to
 44% and 45%, respectively, from 47%  and 47% in the comparable periods  last
 year.  This decrease is due primarily to further cost reduction measures the
 Company has initiated.

      Selling and marketing costs for the three months and nine months  ended
 September  30,  2000  increased   $1,107,000  (10%)  and  $1,302,000   (4%),
 respectively, from the  comparable periods  of 1999.   The  increase is  due
 primarily to the focused national marketing campaign the Company  introduced
 in the first quarter of 2000.

     General and administrative costs for the  three months and  nine months
 ended September  30,  2000 decreased  $429,000  (5%)  and $2,066,000  (7%),
 respectively, from  the  comparable  periods of  1999.    This decrease  is
 primarily attributable to the elimination of duplicate functions within the
 Company.

   Healthcare benefits represents medical losses incurred by insureds of the
 Company's insurance  entities.   Healthcare  benefits  increased $2,325,000
 (214%) and  $3,063,000 (50%)  for the  three months  and nine  months ended
 September 30, 2000, respectively, from the comparable periods of 1999.  The
 loss ratio (losses  as a  percent of premiums)  was 104%  and 103%  for the
 three and nine months  ended September 30,  2000 compared to  61% and 106%,
 respectively, for the comparable periods of  1999.  The Company's insurance
 business is  still  small  and volatile,  so  the  loss  ratio is  somewhat
 unpredictable.
<PAGE>

   Depreciation  and amortization  expenses increased  $2,483,000  (34%) and
 $6,622,000 (30%), respectively, for the three  months and nine months ended
 September 30, 2000  from the  comparable periods of  1999 due  primarily to
 increased technology infrastructure investments made over the course of the
 past several years.  Depreciation expense will continue to grow as a result
 of  continuing  investments  the  Company  is  making  in  its  information
 technology infrastructure.

   Interest expense decreased $317,000 (8%) and increased $733,000 (7%) from
 the comparable periods of 1999. The decrease in the third quarter is due to
 a decrease in the average debt outstanding compared to the third quarter of
 1999.  The  increase for the  nine months ended  September 30, 2000  is due
 primarily to an increase in  the interest rate for  the Company's revolving
 credit agreement.  The interest rate is approximately  7.3% per annum as of
 November 9, 2000.

   Interest income for the three months  and nine months ended September 30,
 2000 decreased $80,000 (5%)  and $98,000 (2%), respectively,  from the same
 periods in 1999 due  to less investible  funds being available  due to debt
 repayment and stock repurchases.  Management estimates that interest income
 should remain  relatively constant  as the  Company  is using  much  of its
 available cash to repay debt.

   Net income for the three months  and nine months ended September 30, 2000
 increased $3,604,000  (21%) and  $9,219,000 (18%),  respectively,  from the
 comparable periods of 1999.  This increase is due primarily to the increase
 in PPO revenue as well as  continued focus on the  further expense controls
 the Company has initiated and the other factors discussed above.

   Diluted net income per common share  for the three months and nine months
 ended September  30,  2000  increased  24%    to  $.42 and  22%  to  $1.22,
 respectively, from the  comparable periods  of 1999.   The increase  in net
 income per  common  share  was  favorably  impacted by  the  repurchase  of
 1,705,000 shares of  Company common stock  during the first  nine months of
 2000 and the  4,045,000 shares repurchased  during the last  nine months of
 1999.   For the  three months  and nine  months ended  September  30, 2000,
 diluted common shares outstanding  decreased 1% and  3%, respectively, from
 the comparable periods of 1999.

 Liquidity and Capital Resources

   The  Company had  $41,165,000 in  working capital  at September  30, 2000
 compared with working capital of $52,625,000 at December 31, 1999.  Through
 the  first  nine  months   of  the  year,   operating  activities  provided
 $117,489,000 of  cash.   Investment  activities  used  $43,976,000 of  cash
 representing net purchases  of investments  of $5,024,000 and  purchases of
 fixed assets of $38,952,000.  Financing activities used $84,327,000 of cash
 representing $62,500,000 in net repayment of long term debt, $46,059,000 in
 purchases of treasury stock and $3,637,000 in loans to employees to finance
 the exercise of stock  options partially offset by  $23,818,000 in proceeds
 from issuance of common  stock, $3,671,000 in stock  option loan repayments
 and $380,000 in proceeds from the sale of put options.
<PAGE>

   On July 1, 1997, the Company entered into a $200 million revolving credit
 agreement (the "Agreement") to  facilitate the acquisition  of First Health
 Strategies, Inc. and First Health Services Corp. ("FHC").  In August, 1997,
 the Agreement was amended to increase available borrowings to $350 million.
 As of  September  30,  2000,  $177.5  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  integration of  the  FHC acquisition  was  completed in  1999.   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 sold several  hundred client contracts  that did not  fit into this
 niche which represented 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  had been  paying fees  at  unreasonably low
 margins.  Although these actions have resulted in the loss of a significant
 number of  clients,  management  expects  these  actions have  resulted  in
 increased efficiency of the Company's operations.

 2001 Outlook

   The Company  is currently  targeting revenue  growth in  the 10%  area to
 approximately $560  million  in 2001.    Diluted earnings  per  share (EPS)
 percentage growth  is  currently estimated  to  be in  the  high teen  area
 resulting in EPS of approximately $1.95 for the year.

   Revenue growth will be led by  our PPO business which is expected to grow
 in the  low teen  area.   Additionally, the  Company has  announced several
 additional new contracts which should  allow us to achieve  the forecast we
 are currently anticipating.  Expenses are  currently forecasted not to grow
 as quickly as the growth in revenue which allows for EPS growth in the high
 teen area.

<PAGE>
 Potential Managed Care Litigation

   Much  has  been recently  written  about  the  plaintiff's bar  attacking
 managed  care  organizations.    We  believe  First  Health  is  very  well
 positioned to avoid litigation for the following reasons:

   *  Counsel for class  action plaintiffs is  sophisticated and understands
      the differences between HMOs, which offer little or no choice to their
      subscribers regarding  provider selection,  and the  PPO  services the
      Company provides.

   *  The Company does not incent or penalize its network physicians through
      capitation, risk sharing, cash incentive bonuses  or other methods for
      denying or limiting care.  Its "control" over physicians is limited to
      qualifying them for  participation in  the network based  on objective
      criteria related  only  to their  credentials,  licensure, malpractice
      history, insurance,  etc.   Network physicians  are  truly independent
      contractors, solely responsible for the health care of their patients.

   *  Consistent with many state law requirements and national accreditation
      standards,  there  is  no  direct  or   indirect  financial  bonus  or
      remuneration paid  to individuals  involved in  the  recommendation of
      medical care based on medical necessity.

   *  Most importantly, participants  in our  customers' plans  have choice.
      Commonly, our customers offer 2  or more plan options,  the PPO option
      alone inherently provides choice with a meaningful (but compared to an
      HMO, modest) benefit differential.  The  choice of medical specialists
      is solely  within  the  control  of  the treating  physician  and  the
      patient.

 HIPAA Administrative Simplification

      The  Health  Insurance  Portability  and  Accountability  Act  of  1996
 ("HIPAA") directs the  Department of Health  and Human  Services ("HHS")  to
 issue regulations setting  standards for the  electronic exchange of  health
 care claims  information  among health  care  providers, payers,  and  plans
 ("EDI"), as  well  as security  for  the  exchange of  information  via  the
 internet ("E-Commerce").  This directive is  commonly referred to as  "HIPAA
 Administrative Simplification".  HHS has issued its first final rule with an
 implementation date of October 16, 2002  ("First Final Rule").  The  Company
 is in the process  of reviewing its readiness  to implement the First  Final
 Rule and anticipated future rules.

      The  Company   has  instituted  a   corporate   HIPAA   Administrative
 Simplification Committee and  Workgroup to  identify processes,  systems or
 policies that  will  require  modification  and  to  implement  appropriate
 remediation and  contingency  plans  to avoid  any  adverse  impact on  its
 ability to perform  services in  accordance with the  applicable standards.
 The  Company  will  also  be  communicating  with  significant  third-party
 business partners to  assess their  readiness and the  extent to  which the
 Company will need to modify its relationship  with these third parties when
 conducting EDI or E-Commerce.
<PAGE>

   The cost  for this compliance effort  has not been determined,  but it is
 expected that  the cost  will  not be  material  and that  portions  of the
 expenses are already included  in the Company's current  EDI and E-Commerce
 initiatives.  However, there  can be no  guarantee that the  costs will not
 materially differ from  those anticipated or  that the Company  will not be
 materially  impacted.    Additionally,  the  Company   expects  to  receive
 reimbursement directly from a  number of its  clients due to  the nature of
 the contractual arrangement with these entities.

 Year 2000 Matters

   The  Company  has not  experienced  any  material adverse  impact  on  its
 operations or in its  relationships with customers, vendors  or others as  a
 result of Y2K  issues.  The  Company did not  incur any  material Y2K  costs
 during the nine months ended September 30, 2000, nor does it expect to incur
 any material Y2K costs going forward.


 New Accounting Pronouncements

   In June  1998, the Financial  Accounting Standards Board  issued SFAS No.
 133, "Accounting For Derivative Instruments and  Hedging Activities".  SFAS
 No. 133 requires  that all derivative  instruments be recognized  as either
 assets or liabilities in the balance  sheet and that 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 the Company beginning January 1, 2001.  The
 Company has prepared an inventory of derivatives as defined by SFAS No. 133
 and has determined that SFAS No. 133 will not have a material effect on its
 results of operations and financial position.


 Legal Proceedings

   Any material legal proceedings of the Company are discussed in note 6 to
 the financial statements and are incorporated herein by reference.


 Item 3. Quantitative and Qualitative Disclosures About Market Risk

   The Company's  market risk exposure  at September 30,  2000 is consistent
 with the types of market risk and amount of  exposure presented in its 1999
 Annual Report on Form 10-K.

<PAGE>

 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:

           None

<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:    November 14, 2000        /s/James C. Smith
                                    -------------------------------------
                                    James C. Smith
                                    President and Chief Executive Officer


 Dated:    November 14, 2000        /s/Joseph E. Whitters
                                    -------------------------------------
                                    Joseph E. Whitters
                                    Chief Financial Officer
                                    (Principal Financial and Accounting
                                    Officer)