EXHIBIT 10.1


                             EMPLOYMENT AGREEMENT


 This AGREEMENT is  made this 22nd  day of March  2004 by  and between  First
 Health  Group  Corp.,  a  Delaware  corporation  headquartered  in  Illinois
 ("Company"), and William McManaman ("Employee").

                                  BACKGROUND

 A. Company desires to  employ Employee, and Employee desires to be  employed
 by Company.

 B. For  and in consideration  of the promises  and of  the mutual  covenants
 hereinafter set forth,  it is hereby  agreed by and  between the parties  as
 follows:

                                  AGREEMENT

    1. Employment.  Effective March 22,  2004 (the "Effective Date")  Company
 hereby agrees to employ Employee to perform the duties set forth in  Section
 3 hereof  ("Employee  Services").   Employee  hereby accepts  employment  to
 perform Employee Services  for Employer under  the terms  and conditions  of
 this Agreement.

    2. Term.  Subject  to earlier termination pursuant  to Section 8  hereof,
 the term of Employee's employment under this Agreement will be for four  (4)
 years beginning  on  the  Effective  Date  (the  "Initial  Term")  and  will
 automatically renew  for consecutive  one (1)  year terms  (each a  "Renewal
 Term" and collectively  with the Initial  Term the  "Term"), unless  earlier
 terminated pursuant to Section  6 hereof on  or before a  date which is  one
 year prior  to  the  end  of  the Initial  Term  or  the  Renewal  Term,  as
 applicable,  provided,  however,  automatic   renewal  shall  not   preclude
 termination by either party upon notice pursuant to Section 6(a) and subject
 to the obligations of such party under Section 6.

    3. Duties.   Employee will  initially serve  as Senior  Vice President  _
 Finance.   On March  17, 2004,  Employee will  be nominated  and  appointed,
 subject to approval by  the Company's Board of  Directors (the "Board"),  as
 Chief Financial Officer.   Employee  will perform  all responsibilities  and
 duties as are assigned, or delegated to Employee, by the President and Chief
 Executive Officer of the Company ("CEO"), which responsibilities and  duties
 include but are not  limited to all the  functions and responsibilities  set
 forth in the Bylaws of the Company and all financial, accounting and similar
 responsibilities and obligations of  the Company.   Employee will report  to
 and is subject to supervision by the CEO, President or Chairman.

    4. Time Commitment.   Employee  will  devote Employee's  entire  business
 time, attention  and  energies  to the  performance  of  Employee  Services.
 Employee may not be associated with, consult, advise, work for, be  employed
 by, contract with,  or otherwise devote  any of the  Employee's time to  the
 pursuit of any other  work or business activities  which may interfere  with
 the performance of services hereunder.  Notwithstanding the foregoing,  with
 the written approval of  the CEO Employee may  serve on corporate, civic  or
 charitable boards, provided that  such service does  not interfere with  the
 performance of the Employee  Services.  Employee is  currently serving as  a
 member of the Board of Directors of AMCORE Financial, Inc., and such service
 is hereby approved.

    5. Compensation  and   Benefits.     Company  will   pay  the   following
 compensation to Employee in full  consideration for performance of  Employee
 Services  hereunder  in  accordance  with  Company's  then-current   payroll
 policies and procedures.

       (a) Salary.  Employee will receive a  gross annual salary of  $450,000
 ("Base Salary").  This salary is payable in accordance with Company's then -
 current payroll policies and  procedures.  The gross  annual salary will  be
 subject to annual review by the Company and the Board of Directors.

       (b) Incentive Compensation.  As soon as  practicable after the end  of
 each fiscal year of the Company during the Term and commencing with the year
 ending December 31, 2004, the Company's  Pretax Income for such fiscal  year
 (as determined in accordance with generally accepted accounting  principles)
 will be  compared  to  the  Company's  Pretax  Income  for  the  immediately
 preceding fiscal year (Threshold Year).   If Pretax Income has increased  by
 5% or more for the year,  the resulting percentage increase (rounded to  the
 nearest whole number) will be used  to determine any Incentive  Compensation
 payable to Employee in accordance with the following table:

                                         Incentive Compensation Factor
       Pretax Income Increase        (as % of Threshold Year Base Salary)
       ----------------------        ------------------------------------
            5%   -    9%                           25% - 49%
           10%   -   19%                           50% - 74%
           20%   -   29%                           75% - 99%
           30%   -   39%                          100% - 124%
           40%   -   49%                          125% - 149%
           50% and above                              150%

           In example, if Base Salary equals  $450,000 and the Pretax  Income
           increases 7%, Employee will receive  $157,500 or 35% of  Threshold
           Year  Base  Salary   as  Incentive   Compensation  (the   relative
           incremental difference between 25% and 49%.

           Provided, however, that for the year ending December 31, 2004, the
 amount of Employee's Incentive  Compensation shall not be  less than 50%  of
 his Base Salary.  For purposes  of this Agreement Employee's "Target  Bonus"
 shall be 50% of Base Salary as from time to time in effect.

           If  a  merger,  acquisition,  accounting  pronouncement  or  other
 unusual financial  event of  the Company  causes a  material change  to  the
 Pretax Income for any year, Employee and Company agree that for the  purpose
 of this Agreement  only, Pretax Income  will not include  the unusual  event
 and/or will be modified to neutralize the financial effect of the event.

           If the Company makes revisions  to the senior executive  incentive
 compensation plan, then the Incentive  Compensation provisions set forth  in
 this Section 5(b) shall be similarly  amended. Additionally, if the  Company
 adopts a new  incentive compensation plan  for its  senior executives  which
 would provide Employee  with a greater  bonus opportunity  than provided  in
 this Section 5(b),  then Employee will  be eligible to  participate in  such
 incentive compensation plan and  the provisions of  this Section 5(b)  shall
 thereafter no longer be applicable to Employee.

       (c) Expenses.  Company will reimburse Employee for all reasonable  and
 necessary expenses incurred by Employee  in connection with the  performance
 of Employee Services  upon submission by  Employee of  expense reports  with
 substantiating vouchers,  in  accordance  with the  Company's  then  current
 expense reimbursement policy.

       (d) Stock  Options.   As  an inducement  to  his  entering  into  this
 Agreement, upon the Effective Date, the Company shall grant to the  Employee
 options to  purchase  a total  of  250,000 shares  of  Common Stock  of  the
 Company, each such option to be on  the terms and subject to the  conditions
 of the respective stock  option agreements (the  "Option Agreements") to  be
 entered into between the  Company and the Employee,  the forms of which  are
 attached hereto as Exhibits  1, 2, 3 and  4.  In  addition, for years  after
 2004, Employee  will be  eligible  for awards  of  options or  other  equity
 compensation as determined  by the Board  in accordance  with the  Company's
 stock option plan applicable to senior executives at the time.

       (e)  Benefits  and  Flexible Time Off.   Employee  shall  be  entitled
 to participate  in  such group  life  insurance, major  medical,  and  other
 employee benefit  plans (collectively  "Benefit  Plans") as  established  by
 Company in  accordance with  the applicable  terms  and conditions  of  such
 Benefit Plans,  which  Benefit Plans  may  be modified  or  discontinued  by
 Company at  any  time;  provided,  however  that  Employee  shall  meet  the
 requirements of  the  Benefit  Plans for  participation  and  in  no  event,
 including breach or wrongful termination  of this Agreement, shall  Employee
 be entitled to any amount of  compensation in lieu of participation,  unless
 otherwise provided by the terms of the Benefit Plan.

       Employee shall also  be entitled to paid  time off in accordance  with
 Company's then current Flexible  Time Off ("FTO")  program.  Employee  shall
 accrue such FTO at the rate specified in the FTO program.  Flexible Time Off
 shall be taken with due consideration for the services required of  Employee
 and to the requirements of Company.

    6. Termination.

       (a) Either party may terminate this Agreement  at any time during  the
 Term, without cause, upon  no less than one  hundred and twenty (120)  day's
 prior written notice.   If requested by Company,  Employee will continue  to
 render Employee Services and be paid  Employee's regular compensation up  to
 the date of  termination in accordance  with Company's then-current  payroll
 policies and procedures.

       (b) Employee may terminate  his employment with  the Company for  Good
 Reason (as herein defined) fourteen (14) days following delivery of  written
 notice of intent to terminate for Good Reason (subject to Company's  limited
 right to cure), and such notice will set forth in specific detail the  basis
 for the termination for Good Reason.  "Good Reason" means (i) failure to  be
 elected as  Chief  Financial Officer  at  the Company's  annual  meeting  of
 shareholder in  2004, (ii)  a  material diminution  in  his title;  (iii)  a
 material change  in his  responsibilities such  that  he no  longer  reports
 directly to the  CEO,  President,  or Chairman, (iv)  a requirement that  he
 relocate his personal  residence more than  fifty (50)  miles from  Chicago,
 Illinois  (or  from  such  other  locations  to  which  Employee  agreed  to
 relocate), or  (v) any  material breach  of this  Agreement by  the  Company
 (whether or not also described in clauses (i) through (iv) above);  provided
 that no act or  omission will constitute Good  Reason unless Employee  gives
 Company written notice  of such act  or omission and  Company fails to  cure
 such act or omission within fourteen (14) days after delivery of such notice
 (except that Employee will not be required to provide such notice more  than
 once in cases of  repeated acts or  omissions).  Any  notice by Employee  of
 Good Reason will be ineffective  unless it is given  not later than six  (6)
 months after Employee has knowledge of  any act or omission, the  occurrence
 of which is claimed to constitute Good Reason.

       (c) Either party may  terminate this  Agreement at  anytime for  cause
 upon  fourteen  (14)   days  written  notice.   "Cause"  includes,   without
 limitation, breach of any provision of this Agreement or Employee's  failure
 to adhere to the  Company's policies and  procedures.  If  the cause is  not
 cured within the  14 day  period, the Agreement  may then  be terminated  by
 written  notice.   An opportunity  to  cure is  not  required if  the  party
 receiving  notice  of  termination  has  previously  been  given  notice  of
 termination and the opportunity to cure the same or similar cause.

       (d) Company may terminate this Agreement by written notice at  anytime
 during the Term immediately  for the following reasons:  (i) Death or  legal
 incapacity of  Employee;  (ii)  Employee's conviction  of  a  felony;  (iii)
 willful violation of the Company's  policies or standards including  without
 limitation, Corporate Compliance standards such as Insider Trading, Code  of
 Ethics and Conflict of Interest, confidentiality and nondisclosure; or  (iv)
 theft or dishonesty.

       (e) Company may  terminate at  any time  during  the Term  by  written
 notice upon Employee's  other incapacity  or inability  to perform  Employee
 Services for a period of at least 90 consecutive days because of  impairment
 of Employee's physical, or mental health making it impossible or impractical
 for Employee to perform Employee Services.

       (f) If Employee's employment is terminated under Sections 6(a), or (b)
 Employee shall be entitled to receive the following as severance:

           (i) continued Base Salary for the  remainder of the Initial  Term,
 or if such termination is during the Renewal Term, for the remainder of  the
 then one  year  Renewal  Term, payable  in  installments  according  to  the
 Company's normal payroll practices applicable to senior executives; and

           (ii) an amount  equal to  his Target Bonus  for each  year of  the
 remainder of the Initial Term, or if such termination is during the  Renewal
 Term, for  the Renewal  Term, payable  each year  at the  same time  as  the
 Company pays bonuses to its employees;

 provided, that at Employee's election, the  Base Salary described in  clause
 (i) and the amount of Target Bonus described in clause (ii) shall instead be
 paid in  an  immediate lump  sum  discounted  to present  value  applying  a
 discount interest rate equal to the interest rate of the Company's revolving
 credit facility at the time of termination.

       (g) If Employee's employment is terminated  under Sections (c) _  (e),
 then Employee shall  be entitled only  to such severance  as Employee  would
 otherwise be entitled  under the Company's  severance policy  in effect  for
 senior executives of the Company at the time of such termination.

       (h) Notwithstanding any other provisions of this Employment Agreement,
 if Employee's employment is terminated by the Company under Section 6(a)  or
 by Employee for  Good Reason under  Section 6(b) at  anytime during the  two
 year period following a change in control of the Company then Employee  will
 receive as  severance a  cash payment  equal to  two times  the sum  of  (I)
 Employees Base  Salary at  the time  of  termination, plus  (II)  Employee's
 Target Bonus. Such payment will include all severance due to Employee  under
 any Company severance  plan but  is not inclusive  of any  other benefit  or
 right due or available to Employee under any other Company plan or Section 6
 of this Agreement.

           "Change in control" for the purposes of this Agreement shall  mean
 a change  in the  ownership or  effective  control of  the Company,  or  the
 ownership of a substantial portion of the assets of the Company, within  the
 meaning of Section  280G of the  Internal Revenue Code  of 1986, as  amended
 (the "Code"), and the regulations issued thereunder.

           If  it  shall  be  determined  by  the  Company  that any payment,
 provision  of any benefit  or  other  amount  to Employee pursuant  to  this
 Agreement or any other  payment,  provision  of any benefit  or other amount
 from the Company or any affiliate of the Company, is or would  be subject to
 the  excise  tax imposed  by Section 4999 of the Code, then the Company will
 pay  an  Excise  Neutralization  Payment  (defined below)  to  Employee with
 respect to such excise tax.  For  purposes  of  this  Agreement,  an "Excise
 Neutralization Payment"  means an additional payment in an amount such that,
 after payment by Employee of all income, and excise taxes on such additional
 amount,  Employee retains an amount from such additional amount equal to the
 excise or similar tax to be neutralized under this Section 6(h).

    7. Confidentiality.  Employee  agrees not to  directly or indirectly  use
 or disclose,  for the  benefit of  any  person, firm  or entity  other  than
 Company and its subsidiary companies, the Confidential Business  Information
 of Company.  Confidential Business Information means information or material
 which is not  generally available to  or used by  others or  the utility  or
 value of which is not generally known or recognized as a standard  practice,
 whether or not the  underlying details are in  the public domain,  including
 but not limited to its computerized and manual systems, procedures, reports,
 client lists, review criteria and methods, financial methods and  practices,
 plans, pricing and  marketing techniques  as well  as information  regarding
 Company's past, present and prospective  clients and their particular  needs
 and requirements, and their own  confidential information.  The  obligations
 of Employee under this provision continue after termination.

       Upon  termination of  employment,  with  or  without  cause,  Employee
 agrees to  return to  Company all  policy  and procedure  manuals,  records,
 notes, data, memoranda,  and reports of  any nature (including  computerized
 and electronically stored  information) which are  in Employee's  possession
 and/or control which relate to (i) the Confidential Business Information  of
 Company, (ii)  Employee's employment  with Company,  or (iii)  the  business
 activities or facilities  of Company or  its past,  present, or  prospective
 clients.

    8. Restrictive Covenant.   During  the  period of  employment and  for  a
 period of one (1) year from the date of termination, with or without  cause,
 Employee will not directly or indirectly, within the United States or in any
 foreign market in  which Employee  was engaged  in activities  on behalf  of
 Company, own, engage  or participate  in any way  in any  business which  is
 similar to  or competitive  with any  actual  or planned  business  activity
 engaged in or planned by Company  at the time the employment was  terminated
 if in the course of such ownership or employment, if it could reasonably  be
 anticipated  that  Employee  would  be  required  to  use  or  disclose  the
 Confidential Business Information of Company. However, this Agreement  shall
 not prohibit ownership of up to two percent  (2%) of the shares of stock  of
 any such corporation whose stock is listed on a national securities exchange
 or is traded in the over-the-counter market.

       Employee further  agrees that,  for a  period of  one (1)  year  after
 termination of employment with Company, with or without cause, Employee will
 promptly notify Company of any business with whom Employee is associated  or
 in which has an ownership interest and provide Company with a description of
 Employee's duties or interests.

       For a  period of one  year after  termination of  employment, with  or
 without cause, Employee will not directly or indirectly, for the purpose  of
 selling services provided or planned by  Company at the time the  employment
 was terminated,  call  upon,  solicit  or  divert  any  actual  customer  or
 prospective customer of Company.  An  actual customer, for purposes of  this
 Section, is any customer  to whom Company has  provided services within  one
 year prior to Employee's termination.  A prospective customer, for  purposes
 of this  Section, is  any prospective  customer to  whom Company  sought  to
 provide services  within  one (1)  year  prior  to the  date  of  Employee's
 termination  and  Employee  has  knowledge  or  and  was  involved  in  such
 solicitation.

    9. Non-Solicitation of  Employees.  Employee  further agrees  that for  a
 period of one year from the date of Employee's termination, with or  without
 cause, Employee shall not directly or indirectly solicit or hire any  person
 who is currently or was an employee of Company at any time during the twelve
 months prior to Employee's termination.

   10. Remedies.   In the  event  Employee breaches  or threatens  to  breach
 Sections 7,  8  or  9  of  this Agreement,  Company  shall  be  entitled  to
 injunctive relief,  enjoining  or  restraining  such  breach  or  threatened
 breach.  Employee acknowledges  that Company's remedy  at law is  inadequate
 and that  Company will  suffer irreparable  injury if  such conduct  is  not
 prohibited.

       Employee  and  Company  agree  that,  because  of  the  difficulty  of
 ascertaining the  amount of  damages in  the  event that  Employee  breaches
 Section 9 of this  Agreement, Company shall be  entitled to recover, at  its
 option, as liquidated  damages and  not as  a penalty,  a sum  equal to  one
 year's annual salary of the employee(s) solicited to leave Company's employ.
 The parties  further  agree that  the  existence  of this  remedy  will  not
 preclude employer from seeking or receiving injunctive relief.

       Employee further agrees that the covenants contained in Sections 7,  8
 or 9 shall be construed as  separate and independent of other provisions  of
 this Agreement and the  existence of any claim  by Employee against  Company
 shall not constitute a  defense to the enforcement  by Company of either  of
 these paragraphs.

   11. Property  Rights.   All  discoveries,  designs,  improvements,  ideas,
 inventions, creations,  and  works of  art,  whether or  not  patentable  or
 subject to copyright, relating  to the business of  Company or its  clients,
 conceived, developed  or  made by  Employee  during employment  by  Company,
 either solely  or  jointly  with  others  (hereafter  "Developments")  shall
 automatically  become  the  sole  property  of  Company.    Employee   shall
 immediately disclose to  Company all  such Developments  and shall,  without
 additional compensation, execute all  assignments, application or any  other
 documents deemed necessary by Company  to perfect Company's rights  therein.
 These obligations  shall  continue for  a  period  of one  year  beyond  the
 termination of employment with respect to Developments conceived,  developed
 or made by Employee during employment with Company.

       Company acknowledges and  agrees that the  provisions of this  section
 shall not apply to inventions for which no equipment, supplies, facility  or
 trade secret information of Company or its clients were used by Employee and
 which were  developed  entirely  on Employee's  own  time  unless  (a)  such
 inventions relate (i) to the business of Company or (ii) to Company's actual
 or demonstrably anticipated research or  development or (b) such  inventions
 result from any work performed by Employee for Company.

   12. Legal Fees.   The Company  will reimburse  Employee for  up to  twenty
 thousand dollars ($20,000) of reasonable attorneys' fees, costs and expenses
 ("Legal Fees")  incurred by  Employee in  connection with  the  negotiation,
 drafting, consultation  and  advice with  respect  to this  Agreement,  upon
 submission of invoices for the Legal Fees.

   13, Assignments.  Neither  party shall have the  right or power to  assign
 any rights or duties under this Agreement without the written consent of the
 other party, provided, however, that Company shall have the right to  assign
 this Agreement  without consent  pursuant to  any corporate  reorganization,
 merger, joint venture or other transaction involving a change of control  of
 Company or to any subsidiary company; further provided, however, that in the
 event of any such permitted assignment, the Company shall remain jointly and
 severally liable for the obligations of the Company or other employer  under
 this Agreement unless such assignment has  the written consent of  Employee,
 which consent shall not be unreasonably withheld.  Any attempted  assignment
 in breach of this Section 12 shall be void.

   14. Severability.    Each  section,  paragraph,  clause,  sub-clause   and
 provision (collectively "Provisions") of  this Agreement shall be  severable
 from each other, and if for any reason the paragraph, clause, sub-clause  or
 provision is invalid or  unenforceable, such invalidity or  unenforceability
 shall not prejudice or in any  way affect the validity or enforceability  of
 any other Provision hereof.

   15. Miscellaneous.

       (a) This Agreement, the  schedules and any  amendments hereto  contain
 the entire agreement of  the parties with respect  to the employment of  the
 Employee and supersedes  all other understandings  whether written or  oral;
 provided, however, that Employee shall comply with all policies, procedures,
 codes of ethics  and other  requirements of  Company as  established in  the
 Colleague Handbook and Corporate Policy Manuals, not inconsistent with  this
 Agreement.

       (b) Failure on  the  part  of  either  party  to  insist  upon  strict
 compliance by the  other with  respect to any  of the  terms, covenants  and
 conditions hereof, shall  not be deemed  a subsequent waiver  of such  term,
 covenant or condition.

       (c) The provisions of any paragraph containing a continuing obligation
 after termination shall  survive such  termination whether  with or  without
 cause and even if occasioned by Company's breach or wrongful termination.

       (d) This Agreement may not be modified except in writing as signed  by
 the parties;  provided, however,  that Company  may amend  or terminate  its
 Benefit Plans, Incentive  Plan, Corporate Policies  and/or employees'  rules
 and regulations in its sole discretion.

       (e) In the event Employee  is the prevailing  party in any  litigation
 under this  Agreement, the  Company  shall reimburse  Employee's  reasonable
 attorneys'  and   expert  witness   fees   promptly  upon   his   reasonable
 substantiation thereof to the Company.

   16. Notices. All notices  hereunder shall be in  writing and delivered  by
 hand, by nationally-recognized  delivery service  that guarantees  overnight
 delivery, or by  first-class, registered or  certified mail, return  receipt
 requested, postage prepaid, addressed as follows:

      If to the Company:  First Health Group Corp.
                          3200 Highland Avenue
                          Downers Grove, Illinois  60515-1223
                          Attention: General Counsel

      with a copy to:     Stephen S. Bowen
                          Latham & Watkins, LLP
                          233 S. Wacker Drive, Suite 5800
                          Chicago, Illinois 60606

      If to Employee, to: William McManaman
                          (at his most recent home address and/or
                          facsimile number on file with Company)

      With copy to:       Roger C. Siske, Esq.
                          Sonnenschein Nath & Rosenthal LLP
                          8000 Sears Tower
                          Chicago, IL 60606

 Either party may from time to time  designate a new address by notice  given
 in accordance with this  Section.  Notice shall  be effective when  actually
 received by the addressee.

   17. Governing Law.   It is the  intention of the  parties hereto that  all
 questions with respect  to the construction,  formation, and performance  of
 this Agreement and the rights and liabilities of the parties hereto shall be
 determined in  accordance with  the laws  of  the State  of Illinois.    The
 parties hereto submit to the jurisdiction and venue of the courts of  DuPage
 County Illinois  in respect  to any  matter  or thing  arising out  of  this
 agreement pursuant hereto.

      IN WITNESS WHEREOF,  the parties hereto  have executed this  Employment
 Agreement in  the State  of Illinois  as of  the day  and year  first  above
 written.

                                 The Company:
                                 First Health Group Corp.


                                 By:
                                      -------------------------------------
                                 Its: President and Chief Executive Officer


                                 Employee:

                                      -------------------------------------
                                      William McManaman