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, 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 November 8, 1999, was 49,065,208.

<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, 1999
       and December 31, 1998                                           3

     Consolidated Balance Sheets - Liabilities and Stockholders'
       Equity at September 30, 1999 and December 31, 1998              4

     Consolidated Statements of Operations for the three months
       ended September 30, 1999 and 1998                               5

     Consolidated Statements of Operations for the nine months
       ended September 30, 1999 and 1998                               6

     Consolidated Statements of Comprehensive Income for the
       three months ended September 30, 1999 and 1998                  7

     Consolidated Statements of Comprehensive Income for the
       nine months ended September 30, 1999 and 1998                   7

     Consolidated Statements of Cash Flows for the nine months
       ended September 30, 1999 and 1998                              8-9

     Notes to Consolidated Financial Statements                      10-12

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                    13-20

     Item 3.  Quantitative and Qualitative Disclosures About
              Market Risk                                             21

  Part II.  Other Information

     Item 6.  Exhibits and Reports on Form 8-K                        22


  Signatures                                                          23

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

<TABLE>

  ASSETS                                September 30, 1999  December 31, 1998
                                           ------------       ------------
  <S>                                     <C>                <C>
  Current Assets:
    Cash and cash equivalents .....       $  26,434,000      $  50,264,000
    Short-term investments ........           1,094,000            961,000
    Accounts receivable, less allowances
     for doubtful accounts of $11,067,000
     and $11,151,000, respectively           60,909,000         63,582,000
    Reinsurance recoverable .......          52,195,000         57,466,000
    Deferred income taxes .........          18,415,000         18,415,000
    Other current assets ..........          11,158,000         10,874,000
                                           ------------       ------------
    Total current assets ..........         170,205,000        201,562,000

  Long-Term Investments:
    Marketable securities .........          74,779,000        125,120,000
    Other .........................          31,319,000         23,431,000
                                           ------------       ------------
                                            106,098,000        148,551,000
                                           ------------       ------------
  Property and Equipment:
    Land, buildings and improvements         65,056,000         59,228,000
    Computer equipment and software         111,938,000         80,944,000
    Office furniture and equipment           13,221,000         13,617,000
                                           ------------       ------------
                                            190,215,000        153,789,000
    Less accumulated depreciation and
       amortization................         (68,910,000)       (49,805,000)
                                           ------------       ------------
    Net property and equipment ....         121,305,000        103,984,000
                                           ------------       ------------
  Goodwill.........................          92,256,000        100,151,000
  Other Assets.....................           2,417,000          3,631,000
                                           ------------       ------------
                                          $ 492,281,000      $ 557,879,000
                                           ============       ============

           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, 1999  December 31, 1998
                                           ------------       ------------
  <S>                                     <C>                <C>
  Current Liabilities:
    Accounts payable ..............       $  44,906,000      $  52,408,000
    Treasury stock purchase payable          22,575,000         25,000,000
    Accrued expenses ..............          30,108,000         33,545,000
    Income taxes payable ..........           9,125,000          2,611,000
    Claims reserves ...............          63,617,000         72,589,000
                                           ------------       ------------
    Total current liabilities .....         170,331,000        186,153,000

  Long-Term Debt...................         220,000,000        225,000,000
  Other Non-Current Liabilities....           8,584,000          8,599,000
                                           ------------       ------------
    Total liabilities .............         398,915,000        419,752,000
                                           ------------       ------------
  Commitments and Contingencies....                  --                 --

  Stockholders' Equity:
    Common stock ..................             768,000            765,000
    Additional paid-in capital ....         187,103,000        182,842,000
    Retained earnings .............         432,963,000        384,143,000
    Accumulated comprehensive income         (3,596,000)        (3,099,000)
    Treasury stock, at cost .......        (523,872,000)      (426,524,000)
                                           ------------       ------------
    Total stockholders' equity ....          93,366,000        138,127,000
                                           ------------       ------------
                                          $ 492,281,000      $ 557,879,000
                                           ============       ============

              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,
                                          --------------------------------
                                               1999               1998
                                           ------------       ------------
  <S>                                     <C>                <C>
  Revenues............................    $ 113,421,000      $ 125,962,000
                                           ------------       ------------
  Operating expenses:
    Cost of services .................       53,173,000         57,730,000
    Selling and marketing ............       11,252,000         12,228,000
    General and administrative .......        8,959,000         10,751,000
    Healthcare benefits ..............        1,087,000          5,233,000
    Depreciation and amortization ....        7,395,000          6,027,000
                                           ------------       ------------
                                             81,866,000         91,969,000
                                           ------------       ------------
  Income from operations..............       31,555,000         33,993,000

  Other (income) expense:
    Interest expense .................        3,944,000          3,122,000
    Interest income ..................       (1,546,000)        (5,721,000)
                                           ------------       ------------
  Income before income taxes..........       29,157,000         36,592,000
  Income taxes........................      (12,008,000)       (14,342,000)
                                           ------------       ------------
  Net income..........................    $  17,149,000      $  22,250,000
                                           ============       ============

  Weighted average shares
   outstanding - basic                       49,599,000         62,468,000
                                           ============       ============
  Net income per common share - basic.    $         .35      $         .36
                                           ============       ============
  Weighted average shares
   outstanding - diluted                     50,388,000         63,573,000
                                           ============       ============
  Net income per common share - diluted   $         .34      $         .35
                                           ============       ============


              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,
                                           -------------------------------
                                               1999               1998
                                           ------------       ------------
  <S>                                     <C>                <C>
  Revenues............................    $ 346,212,000      $ 380,462,000
                                           ------------       ------------
  Operating expenses:
    Cost of services .................      163,401,000        170,436,000
    Selling and marketing ............       34,444,000         37,481,000
    General and administrative .......       27,831,000         32,439,000
    Healthcare benefits ..............        6,082,000         13,804,000
    Depreciation and amortization ....       21,743,000         18,365,000
                                           ------------       ------------
                                            253,501,000        272,525,000
                                           ------------       ------------
  Income from operations..............       92,711,000        107,937,000

  Other (income) expense:
    Interest expense .................       10,939,000          9,467,000
    Interest income ..................       (4,962,000)       (16,563,000)
                                           ------------       ------------
  Income before income taxes..........       86,734,000        115,033,000
  Income taxes........................      (35,055,000)       (46,358,000)
                                           ------------       ------------
  Net income..........................    $  51,679,000      $  68,675,000
                                           ============       ============

  Weighted average shares
   outstanding - basic                       50,995,000         63,022,000
                                           ============       ============
  Net income per common share - basic.    $        1.01      $        1.09
                                           ============       ============
  Weighted average shares
   outstanding - diluted                     51,529,000         64,225,000
                                           ============       ============
  Net income per common share - diluted   $        1.00      $        1.07
                                           ============       ============


              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,
                                               1999               1998
                                           ------------       ------------
  <S>                                     <C>                <C>
  Net income..........................    $  17,149,000      $  22,250,000
                                           ------------       ------------
  Unrealized losses on securities,
    before tax........................          (95,000)        (4,856,000)
  Income tax benefit related to items
    of other comprehensive income.....           39,000          1,929,000
                                           ------------       ------------
  Other comprehensive loss............          (56,000)        (2,927,000)
                                           ------------       ------------
  Comprehensive income................    $  17,093,000      $  19,323,000
                                           ============       ============




                                           Nine Months Ended September 30,
                                               1999               1998
                                           ------------       ------------

  Net income..........................    $  51,679,000      $  68,675,000
                                           ------------       ------------
  Unrealized losses on securities,
    before tax........................         (834,000)        (8,799,000)
  Income tax benefit related to items
    of other comprehensive income.....          337,000          3,546,000
                                           ------------       ------------
  Other comprehensive loss............         (497,000)        (5,253,000)
                                           ------------       ------------
  Comprehensive income................     $ 51,182,000      $  63,422,000
                                           ============       ============

              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,
                                                1999               1998
                                            ------------       ------------
  <S>                                      <C>                <C>
  Cash flows from operating activities:
    Cash received from customers ......... $ 351,732,000      $ 386,470,000
    Cash paid to suppliers and employees .  (233,675,000)      (257,083,000)
    Healthcare benefits paid .............    (8,498,000)        (7,160,000)
    Interest income received .............     5,449,000         11,816,000
    Interest expense paid ................   (10,733,000)        (7,372,000)
    Income taxes paid, net ...............   (27,866,000)       (33,200,000)
                                            ------------       ------------
 Net cash provided by operating activities    76,409,000         93,471,000
                                            ------------       ------------
  Cash flows from investing activities:
    Purchases of investments .............   (60,522,000)      (246,661,000)
    Sales of investments .................   102,053,000        227,800,000
    Acquisition of businesses, net
      of cash acquired ...................            --           (173,000)
    Purchase of property and equipment ...   (37,182,000)       (38,165,000)
                                            ------------       ------------
    Net cash provided by (used in)
   investing activities...................     4,349,000        (57,199,000)
                                            ------------       ------------
  Cash flows from financing activities:
    Exercises of put options on common stock  (4,429,000)                --
    Purchase of treasury stock ...........   (99,773,000)       (84,408,000)
    Extinguishment of long-term debt .....   (15,000,000)                --
    Stock option loans to employees ......    (2,859,000)                --
    Proceeds from issuance of common stock     4,217,000         20,572,000
    Proceeds from sale of put options
      on common stock ....................     3,256,000                 --
    Proceeds from issuance of long-term debt  10,000,000                 --
                                            ------------       ------------
    Net cash used in financing activities   (104,588,000)       (63,836,000)
                                            ------------       ------------
  Net decrease in cash and cash equivalents  (23,830,000)       (27,564,000)
  Cash and cash equivalents, beginning
    of period                                 50,264,000         77,836,000
                                            ------------       ------------
  Cash and cash equivalents, end of period $  26,434,000      $  50,272,000
                                            ============       ============
  Supplemental cash flow data:
    Acquisition of businesses:
     Cost in excess of net assets acquired $          --      $     173,000
                                            ============       ============
  Non-cash financing activity:
    Treasury stock purchase payable .....  $  22,575,000      $  22,146,000
                                            ============       ============

              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,
                                                  1999           1998
                                               -----------    -----------
  <S>                                         <C>            <C>
  Reconciliation of Net Income to Net
   Cash Provided by Operating Activities:

  Net Income...............................   $ 51,679,000   $ 68,675,000
                                               -----------    -----------
  Adjustments to Reconcile Net Income to Net
   Cash Provided by Operating Activities:
      Depreciation and amortization .......     21,743,000     18,365,000
      Change in provision for uncollectible
       receivables ........................        (84,000)      (211,000)
      Tax benefit from stock options exercised     670,000      5,700,000
      Unrealized holding loss on marketable
       securities .........................        235,000      3,655,000
      (Gain) loss on investment sales .....        880,000     (3,571,000)
      Other, net ..........................        184,000       (669,000)

      Changes in Assets and Liabilities:
      Accounts receivable .................      2,757,000      1,416,000
      Other current assets ................       (284,000)    (6,546,000)
      Reinsurance recoverable .............      5,271,000     82,976,000
      Accounts payable and accrued expenses    (10,939,000)    (9,470,000)
      Claims reserves .....................     (8,972,000)   (76,662,000)
      Income taxes payable ................      6,514,000     11,431,000
      Non-current assets and liabilities ..      6,755,000     (1,618,000)
                                               -----------    -----------
    Total adjustments .....................     24,730,000     24,796,000
                                               -----------    -----------
    Net cash provided by operating activities $ 76,409,000   $ 93,471,000
                                               ===========    ===========

              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,  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.  The Company's  investments  in marketable  securities  which  are
      classified as  available for sale  had a net  unrealized loss  in
      market value of $497,000,  net of deferred income taxes, for  the
      nine months ended  September 30, 1999.   The net unrealized  loss
      as  of   September  30,   1999,  included  as   a  component   of
      stockholders'  equity, was  $3,596,000,  net of  deferred  income
      taxes.  The  Company liquidated its  $12,561,000 investment in  a
      limited partnership during 1998.   The Company received  proceeds
      of $14,798,000 from  the sale including  $1,667,000 in the  third
      quarter of 1999.   The Company has  four separate investments  in
      another limited partnership which  invests in equipment which  is
      leased to third  parties.  The total  investment as of  September
      30, 1999  was $27.9 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.    This
      investment total includes an additional $6.7 million  invested in
      the  second  and   third  quarters  of   1999.    The   Company's
      proportionate share  of the partnership's  income was  $1,036,000
      and $794,000  for the nine  months ended September  30, 1999  and
      1998, 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 1999,  the
      Company  repurchased  5,186,000  shares  for  a  total   cost  of
      approximately  $97.3  million.    Such  shares  are  recorded  as
      treasury shares, at cost,  and can be used for general  corporate
      purposes.  As  of September 30,  1999, approximately 8.1  million
      shares  remain  available  for  repurchase  under  the  Company's
      current  repurchase authorization.
<PAGE>
      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  2,250,000
      shares of common  stock at prices ranging  from $14.50 to  $21.00
      per share.  The  outstanding put options expire on various  dates
      between December  20, 1999  and May 17,  2000.   During the  nine
      months ended September 30,  1999,  977,000 (out of the  5,186,000
      shares 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.

 4   Weighted   average  shares  outstanding   increased  for   diluted
     earnings  per share by  789,000 and 1,105,000  and by 534,000  and
     1,203,000,  respectively,  for the  three  and nine  months  ended
     September 30,  1999 and 1998 due to  the effect of stock  options.
     Diluted net income  per share was $.01 less than basic net  income
     per share for  the three months ended September 30, 1999 and  1998
     and  $.01 and  $.02  less than  basic for  the nine  months  ended
     September 30, 1999 and 1998, respectively, also due to  the effect
     of stock options.

 5.  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 $56,000 and  $2,927,000
     for  the  three   months  ended  September  30,  1999  and   1998,
     respectively,  net of related taxes.   Other comprehensive  income
     was a  loss of $497,000 and $5,253,000  for the nine months  ended
     September 30, 1999  and 1998, respectively, net of related  taxes.
     Total   comprehensive   income   amounted   to   $17,093,000   and
     $19,323,000  and $51,182,000  and $63,422,000  for the  three  and
     nine months ended September 30, 1999 and 1998, respectively.

     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  nine months ended  September 30,  1999 was  not
     material.
<PAGE>

 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   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.

     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.

     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 discovery phase of  the
     litigation is over and the parties are filing various  motions for
     full and partial  relief on many of the claims and  counterclaims.
     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 condition 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,  achieve
  the growth that is anticipated as a result of the Company's  strategy
  of focusing  on larger  multi-sited national  employers, realize  the
  anticipated benefits of certain technology enhancements, and  control
  healthcare benefit expenses, the Company may not achieve its  planned
  1999 and 2000 results (discussed below).

  Recent Developments

    On  July 20,  1999, the  Company announced  it had  entered into  a
  contract with  CNA  to provide  PPO  services to  the  Mail  Handlers
  Benefit Plan,  one of  the largest  federal employee  health  benefit
  plans with over  400,000 members  and 1 million  participants.   When
  fully implemented,  the  contract  is  expected  to  be  one  of  the
  Company's largest in terms of revenue generated.
<PAGE>
    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  needed  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 and  nine months ended  September 30,  1999
  decreased $12,541,000 (10%) and $34,250,000 (9%), respectively,  from
  the  same  periods   last  year.     Operating  expenses   (excluding
  depreciation) decreased $11,471,000  (13%) and  $22,402,000 (9%)  for
  the  three  and  nine  months  ended  September  30,  1999  from  the
  comparable periods in 1998.  The Company's revenues consist primarily
  of fees  for services  provided under  contracts on  a percentage  of
  savings basis (PPO and fee schedule  services) or on a  predetermined
  contractual basis  (claims  administration  and  clinical  management
  services).   The  Company also  derives  revenues based  on  a  fixed
  monthly charge for each participant, excluding covered dependents, in
  a client-sponsored health  care plan or  on a per-transaction  basis.
  As a result of the Company's insurance company acquisitions, revenues
  also include premium revenue.
<PAGE>
    The  following table  sets forth  information with  respect to  the
  sources of  the Company's  revenues for  the  three months  and  nine
  months ended September 30, 1999 and 1998, respectively:
<TABLE>
                                        Sources of Revenue
                                        ($ in thousands)
                                 Three Months Ended September 30,
                              --------------------------------------
                                1999         %       1998         %
                              -------      ----    -------      ----
   <S>                       <C>           <C>    <C>           <C>
   Sources of Revenue:
     PPO Services            $ 56,723       50%   $ 55,035       44%
     Claims Administration     37,586       33      47,119       37
     Clinical Management
      Services                  8,623        8      10,477        8
     Fee Schedule Services      8,029        7       7,843        6
     Premiums, Net              1,787        1       4,666        4
     Service                      673        1         822        1
                              -------      ----    -------      ----
   Total Revenue             $113,421      100%   $125,962      100%
                              =======      ====    =======      ====


                                        Sources of Revenue
                                         ($ in thousands)
                                 Nine Months Ended September 30,
                              --------------------------------------
                                1999         %        1998       %
                              -------      ----    -------      ----
   <S>                       <C>           <C>    <C>           <C>
   Sources of Revenue:
     PPO Services            $166,753       48%   $167,637       44%
     Claims Administration    120,380       35     140,344       37
     Clinical Management
      Services                 26,053        7      33,448        9
     Fee Schedule Services     25,204        7      22,897        6
     Premiums, Net              5,744        2      13,983        3
     Service                    2,078        1       2,153        1
                              -------      ----    -------      ----
   Total Revenue             $346,212      100%   $380,462      100%
                              =======      ====    =======      ====
</TABLE>
<PAGE>
    Revenue for  the three  months and  nine ended  September 30,  1999
  decreased 10% and 9%, respectively, from the same periods 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 September 30,  1999 increased $1,688,000 (3%)  primarily
  as a result of additional revenue from existing clients.  PPO revenue
  for the nine months ended September 30, 1999 decreased  $884,000 (1%)
  from the same period in 1998. The decrease year-to-date  is primarily
  due to a loss of business as discussed under "FHC Acquisition Status"
  and "The  Company's  Traditional Business".    Claims  administration
  revenue   decreased   $9,533,000   (20%)   and   $19,964,000   (14%),
  respectively, from the same periods last  year for the same  reasons.
  Revenue from clinical cost  management services decreased  $1,854,000
  (18%) and $7,395,000  (22%), respectively, for  the three months  and
  nine months ended September 30, 1999  from the comparable periods  in
  1998.  This decrease  is also due to  the loss of business  mentioned
  above.  Revenue  from fee schedule  services increased $186,000  (2%)
  and $2,307,000 (10%),  respectively, from the  comparable periods  in
  1998 due primarily  to new contracts  and expanded contract  activity
  with several existing clients.  Premium revenue  decreased $2,879,000
  (62%) and $8,239,000  (59%), respectively, for  the three months  and
  nine months ended September 30, 1999  from the comparable periods  in
  1998 due primarily to the planned loss of several clients as a result
  of price increases implemented by the Company.

    Cost of services decreased $4,557,000 (8%) and  $7,035,000 (4%) for
  the  three  months  and  nine   months  ended  September  30,   1999,
  respectively, from the comparable periods 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  and nine  months
  ended September  30, 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.   The
  costs for Year 2000 compliance are  nearly complete as of the end  of
  the third quarter in 1999.   Fourth quarter costs should be far  less
  than those experienced in prior quarters.

    Selling and  marketing costs for the  three months and nine  months
  ended September 30, 1999 decreased $976,000 (8%) and $3,037,000 (8%),
  respectively, from the comparable periods of  1998.  The decrease  is
  due primarily to the consolidation of  FHC sales activities into  the
  traditional Company sales activities.
<PAGE>
    General  and administrative  costs for  the three  months and  nine
  months ended  September  30,  1999  decreased  $1,792,000  (17%)  and
  $4,608,000 (14%), respectively, from the comparable periods  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.  Healthcare benefits  decreased
  $4,146,000 (79%) and $7,722,000 (56%) for  the three and nine  months
  ended September 30, 1999,  respectively, from the comparable  periods
  of 1998.  This  decrease is due primarily  to the termination of  the
  Company's unprofitable HMO-like business.  The loss ratio  (losses as
  a percent of premiums) was 61% and 106%, respectively, for  the three
  months and nine months ended September 30, 1999 compared to  112% and
  99%,  respectively,  for  the  comparable  periods  of  1998.     The
  improvement in the loss ratio during the third quarter of 1999 is due
  to termination  of  the  Company's  unprofitable  HMO-like  business,
  improved experience  in  the  remaining book  of  business,  and  the
  addition of  clients  in  the  more  profitable  employer  stop  loss
  insurance business.

    Depreciation and  amortization expenses increased $1,368,000  (23%)
  and $3,378,000 (18%),  respectively, for  the three  months and  nine
  months ended September 30, 1999 from  the comparable periods of  1998
  due  primarily  to  purchases  of  computer  hardware  and  software.
  Depreciation expense will continue to grow  primarily as a result  of
  continuing investments  the  Company  is making  in  its  information
  technology infrastructure.

    Interest  income  for  the  three  months  and  nine  months  ended
  September 30, 1999 decreased $4,175,000 (73%) and  $11,601,000 (70%),
  respectively, from the same periods in  1998 due to the 51%  decrease
  in cash equivalents and investments since  September 30, 1998.   Cash
  equivalents and investments have decreased  primarily as a result  of
  approximately $220  million  in  repurchases of  common  stock  since
  September 30, 1998.

    Interest  expense increased  $822,000  (26%) and  $1,472,000  (16%)
  from the comparable periods of 1998 due to a $20 million  increase in
  the amount of debt outstanding  under the Company's revolving  credit
  agreement since September 30, 1998.   The interest rate is  currently
  about 7% per annum.

    Net income  for the three  months and nine  months ended  September
  30,  1999,  decreased   $5,101,000  (23%)   and  $16,996,000   (25%),
  respectively, from the comparable periods of 1998.  This  decrease is
  due primarily to the  planned reductions in  revenue the Company  has
  experienced,  lesser  amounts  of   interest  income  due  to   share
  repurchases, as well as expenses not being reduced as quickly  as the
  revenue declined.
<PAGE>
    Diluted net income per common for the three months  and nine months
  ended September  30, 1999  decreased 3%   to  $.34 and  7% to  $1.00,
  respectively, per share  from the  comparable periods of  1998.   The
  decrease in net income per common share was favorably impacted by the
  12.6 million shares of Company common stock repurchased and  added to
  treasury since September  30, 1998.   For the three  months and  nine
  months ended September  30, 1999, diluted  common shares  outstanding
  decreased 21% and  20% respectively, from  the comparable periods  of
  1998.

  Liquidity and Capital Resources

    The Company  had a  $126,000 working capital  deficit at  September
  30, 1999 compared  with positive  working capital  of $15,409,000  at
  December 31,  1998.   Through  the first  nine  months of  the  year,
  operating  activities  provided  $76,409,000  of  cash.    Investment
  activities provided  $4,349,000 of  cash  representing net  sales  of
  investments  of  $41,531,000  less  purchases  of  fixed   assets  of
  $37,182,000.    Financing  activities   used  $104,588,000  of   cash
  representing $99,773,000 ($25,000,000 which  was payable at  December
  31, 1998 for transactions settled in  1999) in purchases of  treasury
  stock (of which $76,882,000 was purchased on the open market with the
  balance  being  purchased  through  the  exercise  of  put  options),
  $15,000,000 in extinguishment of long-term debt, $2,859,000  in loans
  to employees to finance the exercise  of stock options and  exercises
  of put options in cash of  $4,429,000 partially offset by  $4,217,000
  in proceeds from issuance of common stock, $10,000,000 in issuance of
  long-term debt and $3,256,000 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 September 30, 1999, $220
  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 acquisition will be completed by  the end of
  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 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 unreasonably  low  margins.
  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.
<PAGE>
  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 did  not encounter  the loss of  any meaningful  business
  from its traditional client base in 1999.

  1999 Outlook

    Currently  the Company  anticipates  that its  earnings  per  share
  (EPS) in  1999 will  be  approximately 3%  lower  than 1998  with  an
  estimated decline in revenue in the high single digit area from 1998.
  The Company  anticipates  that its  Claims  Administration,  Clinical
  Management and Risk revenue will all  experience a decline from  1998
  levels.  The Company's  Fee Schedule revenue is  expected to grow  in
  the mid  single  digit area  in  1999 as  the  workers'  compensation
  business continues to grow.  PPO revenue is expected to be comparable
  to 1998.  These revenue fluctuations  reflect the Company's focus  on
  larger multi-sited national employers in the group health area.   The
  Company recently  announced a  new contract  with  the Mail  Handlers
  Benefit Plan that it believes will provide momentum for the Company's
  growth into the year 2000.

  2000 Outlook

    Currently the Company  is targeting revenue growth in the  10% area
  to more  than  $500  million  in  2000.   Earnings  per  share  (EPS)
  percentage growth is currently estimated to be in the high  teen area
  resulting in EPS of approximately $1.60 for the year.

    Revenue growth will  be lead by the  addition of the Mail  Handlers
  Benefit Plan  to our  PPO business.   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, coupled with fewer shares  outstanding, 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..
       They 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 its  customers'  plans  have
       choice.  Commonly, its 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.

    As a result of all of these factors, the Company believes  it is in
  a much better and advantageous position concerning  potential managed
  care litigation.

  Year 2000 Matters

    General

    The  Company  has  substantially  completed  its  Year  2000  ("Y2K")
    readiness project.  The Company's internal modification, testing  and
    implementation phases for  its information technology ("IT")  systems
    have been completed  except for one which  is used to process  claims
    under  a  small  Medicaid contract.    The  testing,  validation  and
    implementation phases for this system are being conducted  consistent
    with  the time  frames required  in the  Company's contract  and  are
    expected to  be completed prior to  the end of  1999.  Y2K  readiness
    efforts related to the  Company's IT Hardware systems is also  nearly
    complete, with  only a small  number of desktop  PCs remaining to  be
    replaced  and/or  upgraded.   The  remainder  of  the  Company's  Y2K
    readiness efforts will be focused on testing its data exchanges  with
    clients  and  third  parties to  ensure  the  compatibility  of  each
    party's Y2K readiness preparations.
<PAGE>
    The  Company  has  also  essentially  completed  its  Y2K   readiness
    preparations for  its non-IT systems.   These  systems are  primarily
    comprised of systems  typically found in commercial office  buildings
    including,  electrical, fire  alarm and  suppression, security,  HVAC
    and elevator systems.   The Company has received assurances from  its
    significant  vendors and  suppliers that  the  Y2K problem  will  not
    materially  adversely effect  their ability  to continue  to  provide
    supplies or services.   Included in its non-IT systems Y2K  readiness
    preparations  are  the Company's  telecommunications  systems.    The
    Company  utilizes systems  from Lucent  and  Nortel for  its  primary
    telecommunication  systems and  has  received assurances  that  these
    systems are Y2K-ready.   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 also Y2K-ready.

    Y2K Project

    The Company's Y2K project  was divided into three major sections:  1)
    IT Software Systems, 2)  IT Hardware Systems and, 3) Non-IT  Systems.
    For  each  major  section,  the  Company  implemented  a   five-phase
    approach:  Inventory   Phase  (Inventory  of  significant   systems);
    Assessment  Phase (Assessment  of  the vulnerability  of  significant
    systems  to  the  Y2K  problem  and  development  of  correction  and
    contingency plans);  Modification/Replacement Phase (Modification  of
    computer source code,  and software, hardware and equipment  upgrade,
    retirement or  replacement); Testing and  Validation Phase  (Testing,
    internally  and with  third parties,  of  all modified,  upgraded  or
    replaced  components   and  interfaces);  and  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:

    The  following  chart graphically  depicts  the  approximate  current
    state of completion for each phase:
<TABLE>
             Inventory  Assessment  Modification   Testing and  Implement-
               Phase      Phase    or Replacement  Validation     ation
                                       Phase          Phase       Phase
             -------     -------      -------        -------     -------
  <S>          <C>         <C>         <C>            <C>          <C>
  IT
  Software     100%        100%         99%            95%          97%
  Systems


  IT
  Hardware     100%        100%         99%            95%          98%
  Systems


  Non-IT       100%        100%         99%            99%          99%
  Systems
</TABLE>
<PAGE>
    Costs
    The Company estimates the total cost of its Y2K readiness project  to
    be approximately $16,000,000 which has been 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.   As of  September  30,  the  Company  had  incurred
    approximately  $15,000,000 (94%)  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 impact  of a Y2K  interruption on the  Company would depend  upon
    the  nature and  extent  of the  interruption.   The  nature  of  the
    problem could be solely within the Company's systems, or it could  be
    due  to some  external problem  outside the  control of  the  Company
    (i.e., the  systems of  clients or some  other third  party).   Also,
    depending  on  the  nature   of  the  problem,  the  extent  of   the
    interruption could be limited  only to a single client, or  encompass
    several  clients.    Depending  on  the  nature  and  extent  of  the
    interruption, the  Company will focus  its resources  and efforts  on
    fixing or  establishing a  workaround to  the problem  as quickly  as
    possible.  Contingency  plans, based upon most reasonably likely  Y2K
    interruption scenarios,  will continue to  be developed and  modified
    as the Company progresses in its Y2K readiness project.  The  Company
    believes,  however, that  the combination  of  its own  internal  Y2K
    readiness efforts  and those of  its clients and  third parties  with
    whom the  Company does business,  together with the  testing of  data
    interchanges with  clients and third  parties, significantly  reduces
    the likelihood  that the Year 2000  problem will cause a  significant
    interruption or  materially impact the  Company's ability to  provide
    its services.

    Notice
    Projected  completion  dates  for  Y2K  modifications,  testing   and
    implementation  are   based  on  current   best  estimates,   derived
    utilizing  numerous  assumptions  of  future  events,  including  the
    continued   availability   of   certain   resources,   third    party
    modification plans and other factors.  First Health believes its  Y2K
    project will  reduce the uncertainty about  the Y2K readiness of  its
    significant  customers, vendors  and  suppliers and,  therefore,  its
    ability  to continue  to  provide its  services  without  significant
    interruptions in  its normal business  operations.   However, due  to
    the general  uncertainty inherent in the  Y2K problem, in  particular
    the uncertainty  of the Y2K  readiness of  customers and  third-party
    suppliers  such as  utility and  telecommunications companies,  First
    Health  is unable to  determine at  this time  whether actual results
    will differ materially from  those anticipated,  whether third  party
    systems on which First Health's systems rely  will be  converted in a
    timely  manner, or  that  failure  by  a  third  party to convert its
    systems,  or a conversion that  is incompatible with  First  Health's
    systems, would not have a material adverse effect on First Health.
<PAGE>
    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, 2000.   The Company does  not
    expect SFAS  No. 133  to have  a material  effect on  its results  of
    operations and financial position.

  Item 3.Quantitative and Qualitative Disclosures About Market Risk

       The Company's  market risk  exposure at  September 30,  1999  is
  consistent with  the types  of market  risk  and amount  of  exposure
  presented in its 1998 Annual Report on Form 10-K.  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:

            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 8, 1999   /s/James C. Smith
                            James C. Smith
                            President and Chief Executive Officer


  Dated: November 8, 1999   /s/Joseph E. Whitters
                            Joseph E. Whitters
                            Chief Financial Officer
                            (Principal Financial and Accounting Officer)