EXHIBIT 10.39

                              EMPLOYMENT AGREEMENT

      This  Agreement  (the  "Agreement"),  is  effective  as of the 28th day of
April,  1998,  by and among  STEPHAN D.  DEUTSCH,  M.D.,  residing at 82 Freeman
Parkway,  Providence,  Rhode Island 02906 (referred to herein as "Dr. Deutsch"),
CAREADVANTAGE, INC., a Delaware corporation with its principal place of business
at  Metropolitan  Corporate  Plaza,  485 C Route 1,  Iselin,  New  Jersey  08830
(referred  to herein as  "CAI"),  and  CAREADVANTAGE  HEALTH  SYSTEMS,  INC.,  a
Delaware  corporation  that is  wholly-owned by CAI, with its principal place of
business at  Metropolitan  Corporate  Plaza,  485 C Route 1, Iselin,  New Jersey
08830 (referred to herein as "CAHS").

      WHEREAS,  Dr.  Deutsch  is a duly  licensed,  highly  credentialed,  board
certified and respected orthopedic surgeon who enjoys an outstanding  reputation
in the  community  for his ability to provide high quality  medical care and his
outstanding management and leadership skills; and

      WHEREAS,  CAHS provides medical and surgical  management and comprehensive
provider  network  services to insurers  and health care  organizations  for the
purpose of assuring high quality,  cost efficient  medical care.  CAHS currently
provides these services to organizations operating in various states; and

      WHEREAS,  CAHS and Dr.  Deutsch  desire  to  enter  into  this  Employment
Agreement  ("Agreement")  for Dr. Deutsch's  performance of his duties as Senior
Vice President and National Medical Director of CAHS.

      In  consideration  of the mutual  premises set forth herein and other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, CAHS and Dr. Deutsch agree as follows:

1. DEFINITIONS

      As used in this Agreement, the following terms shall have the meanings set
forth below:

      1.1 "Affiliate"  shall mean a corporation  which,  directly or indirectly,
controls,  is  controlled  by or is under  common  control  with  CAHS,  and for
purposes hereof, "control" shall mean the ownership of 20% or more of the Voting
Stock of CAHS.

      1.2 "Basic  Salary" shall have the meaning  assigned to it in Section 5 of
this Agreement.

      1.3 "Board" shall mean the Board of Directors of CAHS as duly  constituted
from time-to-time.

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      1.4 "The Business"  shall mean the business to be conducted by CAHS or any
Subsidiary including, but not limited to, Care Management Business as defined in
Section 12.3.

      1.5 "Cause" shall mean:

(a) Dr. Deutsch's  license to practice medicine in the State of Rhode Island, or
any other state,  his Board  Certification or his federal DEA  registration,  is
suspended, revoked, restricted or otherwise limited or terminated as a result of
any disciplinary action, conviction of a crime or finding of incompetency;

(b) Dr.  Deutsch is  expelled,  suspended  or is  subject to other  disciplinary
action by a professional  organization  having  jurisdiction over Dr. Deutsch on
grounds other than for  non-payment  of fees or  resignation by Dr. Deutsch from
any such professional  organization under threat of disciplinary  action on such
grounds;

(c)  Dr.  Deutsch  is  adjudicated  incompetent,  dies,  is  unable  to  perform
substantially  all of the  duties set forth  hereunder  due to any  physical  or
mental  illness,  injury or impairment for one hundred  eighty (180)  continuous
days;

(d) The  continuing  failure of Dr.  Deutsch to perform  his duties to CAHS or a
Subsidiary (other than any such failure resulting from Dr. Deutsch's  incapacity
due to physical or mental illness) after written notice thereof  (specifying the
particulars thereof in reasonable detail) from CAHS and a reasonable opportunity
to be heard and to cure such failure are given to Dr. Deutsch by CAHS;

(e) The conviction of Dr.  Deutsch of a felony or any serious crimes  (including
any  drug-related  offenses)  or the willful  commission  by Dr.  Deutsch of any
intentional wrongdoing outside the scope of his duties under this Agreement;

(f) The commission by Dr.  Deutsch of an act of fraud in the  performance of his
duties;

(g) The order of a federal or state  regulatory  agency or a court of  competent
jurisdiction  requiring  the  termination  of Dr.  Deutsch's  employment  due to
intentional misfeasance or malfeasance by Dr. Deutsch;

(h) The failure of Dr. Deutsch to maintain the standards set forth in Section 11
of this Agreement; or

(i) Dr. Deutsch becomes ineligible for professional liability insurance pursuant
to Section 6.1 (xii).

For  purposes of this  subsection,  no act, or failure to act, on Dr.  Deutsch's
part shall be  considered  "willful"  unless done, or omitted to be done, by him
not in good faith without  reasonable  belief that his action or omission was in
the best interests of CAHS or a Subsidiary.


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1.6 "Code" shall mean the Internal  Revenue  Code of 1986,  as amended,  and the
rules, regulations and interpretations issued thereunder.

1.7  "Commencement  Date"  shall be the date first set forth on page one of this
Agreement.

1.8 "Confidential  Information"  shall include,  without limitation by reason of
specification,  any information,  including,  without limitation, trade secrets,
vendor and customer lists,  pricing policies,  operational  methods,  methods of
doing business,  technical  processes,  formulae,  designs and design  projects,
inventions, research projects, strategic plans, product information,  production
know-how and other business  affairs of CAHS or its Affiliates,  which (i) is or
are  designed  to be used in or are or may be  useful  in  connection  with  the
business of CAHS, any Subsidiary or any Affiliate of any thereof,  or which,  in
the  case  of any of  these  entities,  results  from  any  of the  research  or
development  activities  of any  such  entity,  and  which  (ii) is  private  or
confidential  in that it is not  generally  known or  available  to the  public,
except as the result of  unauthorized  disclosure by or information  supplied by
Dr.  Deutsch,  and (iii) which gives CAHS or a  Subsidiary  or any  Affiliate an
opportunity or the  possibility of obtaining an advantage over  competitors  who
may not know or use such  information  or who are not lawfully  permitted to use
the same.

1.9 "Date of Termination" shall have the meaning assigned to it in Section 7.6.

1.10 "Disability"  shall mean the inability of Dr. Deutsch to perform his duties
of employment for CAHS, pursuant to the terms of this Agreement,  because of the
occurrence of an event that results in the physical or mental disability,  where
such disability shall have existed for a period of more than 90 consecutive days
or an aggregate of 120 days in any 365 day period. Dr. Deutsch shall be entitled
to receive long term disability  payments under the long term disability plan of
CAHS or any Subsidiary  which employs Dr. Deutsch.  The fact of whether or not a
disability  exists hereunder shall be determined by appropriate  medical experts
selected by the Board and agreed to by Dr. Deutsch's physician. The existence of
a  Disability  means  that,  Dr.  Deutsch's  mental  and/or  physical  condition
substantially  interferes with Dr. Deutsch's performance of his duties for CAHS,
and/or its Subsidiaries as specified in this Agreement.

1.11 "Employment  Year" shall mean each  twelve-month  period,  or part thereof,
during which Employee is employed hereunder, commencing on the Commencement Date
and on the same day of any subsequent  calendar year, the first such  subsequent
Employment  Year  being the  twelve-month  period  which will begin on the first
anniversary of the Commencement Date.

1.12  "Notice of  Termination"  shall have the meaning  assigned to that term in
Section 7.5.

1.13 "Person" shall mean any individual, sole proprietorship, partnership, joint
venture,   trust,   unincorporated   organization,   association,   corporation,
institution,  public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise,  including, without limitation, any
instrumentality, division, agency, body or department thereof).


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1.14  "Retirement"  shall mean that Dr.  Deutsch  shall have  reached age 65 and
shall voluntarily retire under CAHS' or a Subsidiary's  retirement plan (if any)
applicable to him or any earlier actual voluntary retirement by Dr. Deutsch from
his employment with CAHS and its Subsidiaries.

1.15 "Restricted Period" shall have the meaning assigned to that term in Section
12.2.

1.16 "Severance" shall have the meaning assigned to that term in Section 7.7.

1.17 "Subsidiary"  shall mean a corporation of which more than 50% of the Voting
Stock is owned, directly or indirectly, by CAHS.

1.18 "Supplemental  Salary shall have the meaning assigned to it in Section 5 of
this Agreement.

1.19  "Term"  shall  mean the  term of  employment  of Dr.  Deutsch  under  this
Agreement.

1.20 "Voting  Stock" shall mean capital stock of a  corporation  which gives the
holder the right to vote in the election of directors  for such  corporation  in
the ordinary  course of business and not as the result of, or  contingent  upon,
the happening of any event.

Wherever from the context it appears appropriate,  each word or phrase stated in
either the singular or the plural shall include the singular and the plural, and
each pronoun  stated in the  masculine,  feminine or neuter gender shall include
the masculine, feminine and neuter.

2. EMPLOYMENT AND DUTIES OF EMPLOYEE

Employment;  Title;  Duties.  CAHS hereby employs Dr.  Deutsch,  and Dr. Deutsch
hereby accepts appointment as Senior Vice President of CAHS and National Medical
Director of CAHS.  The  principle  duties of Dr.  Deutsch,  as National  Medical
Director,  shall be to perform  those  services  set forth on Exhibit A attached
hereto and  incorporated  herein,  and, as Senior Vice President and as National
Medical  Director,  to render services as are necessary and desirable to protect
and  advance  the best  interests  of CAHS and its  Subsidiaries,  acting in all
instances,  under  the  supervision  of and  in  accordance  with  instructions,
directives,  and  guidelines  established  by the  President or  Executive  Vice
President of CAHS. Without further compensation, Dr. Deutsch agrees to serve (if
requested  to do so by the Board and if there is  liability  insurance in effect
satisfactory  to Dr.  Deutsch)  as a director  of CAHS and,  to the extent it is
reasonably  practicable to do so, as an officer  and/or  director of one or more
Subsidiaries.  At all times during the term of this Agreement, Dr. Deutsch shall
retain  the title of Senior  Vice  President  of CAHS and the title of  National
Medical Director of CAHS.


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Performance of Duties. Dr. Deutsch's primary working responsibility shall be the
performance  of his duties as an executive of CAHS and the  performance  of such
other  reasonable  executive  and  medical  duties  as  are  assigned  him  from
time-to-time  that are consistent with his position.  During the Term and except
as  otherwise  provided  herein,  Dr.  Deutsch  shall  not  engage  in or become
employed,  directly or indirectly,  in any business activities without the prior
written  consent of CAHS,  nor shall he act as a  consultant  to or provide  any
services to,  whether on a  remunerative  basis or otherwise,  the commercial or
professional  business of any other Person which  competes  with the Business of
CAHS and its Subsidiaries, without such prior written consent. Nothing contained
in this  Section 2.2 shall  restrict or prohibit  Dr.  Deutsch  from  practicing
medicine and/or participating in any meetings concerning Occupational Health and
Rehabilitation  and Health Solutions  (organizations  with which Dr. Deutsch had
associations  prior to the execution of this  Employment  Agreement)  during the
Term  hereof  provided  such  practice  or  participation  does not  impede  Dr.
Deutsch's  fulfillment of his duties and responsibilities  under this Employment
Agreement.

3. TERM OF EMPLOYMENT

The  employment of Dr. Deutsch  pursuant to this Agreement  shall commence as of
the Commencement  Date and end two years  thereafter,  unless sooner  terminated
pursuant  to  Section 7 of this  Agreement.  On the  second  anniversary  of the
Commencement  Date,  and on  each  anniversary  thereafter,  the  term  of  this
Agreement  shall be extended for an additional one (1) year period unless within
sixty (60) days prior to such  anniversary  date,  either party may give written
notice to the other  that the term  shall not be so  extended.  The term of this
Agreement,  including any extensions thereof, as provided herein, is hereinafter
referred to as the "Term".

4. COMPENSATION AND BENEFITS

CAHS and/or its  Subsidiaries  shall pay Dr. Deutsch as compensation  for all of
the  services  to  be  rendered  by  him  hereunder  during  the  Term,  and  in
consideration  of the various  restrictions  imposed upon Dr. Deutsch during the
Term, and otherwise under this Agreement, the Basic Salary and other benefits as
provided for and  determined  pursuant to Sections 5 and 6,  inclusive,  of this
Agreement.

5. BASIC SALARY/SUPPLEMENTAL SALARY/BONUS AWARDS

5.1 CAHS shall pay Dr.  Deutsch a basic  annual  salary of $250,000  (the "Basic
Salary").  The Basic Salary shall be prorated for the month in which  employment
by CAHS or a Subsidairy  commences or terminates,  and for any  Employment  Year
which is less than twelve (12) months in duration.


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5.2 CAHS shall pay Dr.  Deutsch an annual  supplemental  salary of $50,000  (the
"Supplemental  Salary") for his services as National  Medical  Director of CAHS.
The supplemental salary shall be prorated for the month in which employment with
CAHS or a Subsidiary commences or terminates,  and for any Employment Year which
is less than twelve (12) months in duration.

5.3  During  the  term of this  Agreement,  Dr.  Deutsch  shall be  entitled  to
participate  in such  CAHS'  Executive  Annual  Bonus  Incentive  Plan as may be
established  by the Board,  which  provides  employees with annual bonuses based
upon CAHS profitability.

5.4 The Basic  Salary  specified  in  Section  5.1 and the  Supplemental  Salary
specified  in  Section  5.2  shall  be  payable  in  bi-weekly  installments  in
accordance with CAHS' payroll practices,  less such deductions or amounts as are
required  to  be  deducted  or  withheld  by  applicable  laws  or  regulations,
deductions for employee contributions to welfare and/or fringe benefits provided
by CAHS to Dr. Deutsch and less such other deductions or amounts, if any, as are
authorized by Dr. Deutsch.

6. ADDITIONAL BENEFITS AND REIMBURSEMENT FOR EXPENSES

6.1 Additional Benefits. CAHS shall provide the following additional benefits to
Dr. Deutsch during the Term,  except,  however,  that CAHS reserves the right to
alter or modify any of these benefits provided such alterations or modifications
do not unreasonably affect Dr. Deutsch's terms and conditions of employment:

            (i)  participation  on an equitable basis in CAHS' health  insurance
      benefit plans established for senior management employees of CAHS;

            (ii) vacation  leave with pay in each  Employment  Year to accrue in
      accordance with CAHS personnel policies;

            (iii) personal leave with pay in each  Employment  Year to accrue in
      accordance with CAHS personnel policies;

            (iv) five (5) days education  leave with pay in each Employment Year
      to accrue at the rate of .42 days per month or part thereof;

            (v) Dr.  Deutsch  shall also be entitled  to all holiday  privileges
      approved by the Board during the Term;


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            (vi)  participation  in the group life  insurance  available  to all
      employees of CAHS whereby CAHS will pay the annual premium attributable to
      one times Dr. Deutsch's Basic Salary with Dr. Deutsch having the option to
      purchase at his cost and expense  additional  insurance  (with the benefit
      payable to Dr. Deutsch's  designee) if permissible  under the terms of the
      policy,  and the option to purchase or  continue  the policy,  at his sole
      cost, upon  termination of his employment  hereunder if permissible  under
      the terms of the policy.

            (vii)  participation  in the  long-term  disability  plan of CAHS in
      accordance with company policy;

            (viii)  participation  in the short-term  disability plan of CAHS in
      force at the time of such disability.

            (ix) participation by Dr. Deutsch in a CAI stock award and CAI stock
      option plan for senior management of CAHS on a basis determined by CAHS on
      a basis at least consistent for senior management of CAHS.

            (x) participation by Dr. Deutsch in CAHS's 401(k) plan in accordance
      with Company policy;

            (xi) participation by Dr. Deutsch in other benefits,  as established
      from time to time by CAHS.

            (xii)  Dr.  Deutsch  will  be  covered  by  professional   liability
      insurance in force for senior management of the Company;

      6.2 Reimbursement of Licensing Fees and Subscription  Charges.  CAHS shall
reimburse Dr. Deutsch for any out-of-pocket expenses (not paid directly by CAHS)
that are incurred by Dr.  Deutsch in connection  with the renewal of his medical
license in Rhode Island, subscription charges,  professional membership fees and
costs incurred by Dr. Deutsch in connection  with  professional  fees related to
medical  licensure.  Reimbursement  under this  Section 6.2 shall not exceed the
amount of $2500 per year.

      6.3 Reimbursement of Continuing  Medical  Education.  CAHS shall reimburse
Dr. Deutsch for any reasonable  and necessary  out-of-pocket  expenses (not paid
directly by CAHS) that are incurred by Dr. Deutsch in connection with his annual
Continuing Medical Education requirements,  if any, including program or tuition
costs, travel,  lodging,  meals and telephone.  Reimbursement under this Section
6.3 shall not exceed the amount of $5,000 per year.


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      6.4  Reimbursement  of Expenses.  CAHS shall reimburse Dr. Deutsch for any
reasonable and necessary out-of-pocket expenses (not paid directly by CAHS) that
are incurred by Dr. Deutsch in connection  with the duties  performed under this
Agreement,  including travel,  lodging,  meals and telephone calls in connection
with the business of CAHS.  Dr. Deutsch will submit  appropriate  documentation,
approved  as to form,  by CAHS,  to CAHS on a  monthly  basis  for the  eligible
expenses specified hereunder that were incurred during that time period. Payment
will be made by CAHS to Dr. Deutsch no later than the thirtieth  (30th) calendar
day following receipt of such bills.

      6.5 CAHS agrees to provide Dr. Deutsch with appropriate  computer hardware
and software as determined by CAHS and a  pager/beeper  to be used in connection
with his duties and responsibilities under this Employment Agreement.

      6.6 Reimbursement of Malpractice  Insurance Expense.  CAHS shall reimburse
Dr. Deutsch up to $8,000 per year for the first year of this Agreement and up to
$6,500 per year for the second year of this Agreement for malpractice  insurance
upon presentation of paid receipts by Dr. Deutsch.

7. TERMINATION OF EMPLOYMENT

      7.1 Death.  If Dr.  Deutsch dies during the Term, on the date of his death
this Agreement shall terminate.

      7.2  Disability.  If, during the Term, Dr. Deutsch has a Disability,  CAHS
may, at any time after Dr.  Deutsch has a Disability,  terminate  Dr.  Deutsch's
employment by written notice to him; provided, however, that CAHS shall maintain
in effect and continue to pay all premiums  due under Dr.  Deutsch's  disability
insurance policy if the continued payments of such premium is a condition to the
continuation of Dr. Deutsch's disability payments.

      7.3  Retirement.  The  Agreement  will  be  terminated  by  Dr.  Deutsch's
Retirement at the date of such Retirement.

      7.4 Termination  for Cause.  CAHS may terminate Dr.  Deutsch's  employment
hereunder  for Cause at any time by written  notice given to Dr.  Deutsch by the
CEO.

      7.5 Notice of Termination. Any purported termination of employment by CAHS
or a  Subsidiary  by reason of Dr.  Deutsch's  Disability  or for Cause shall be
communicated by written Notice of Termination to Dr. Deutsch signed by the Chief
Executive  Officer.  For purposes of this  Agreement,  a "Notice of Termination"
shall mean a notice given by CAHS which shall  indicate  the specific  basis for
termination and shall set forth in reasonable detail the facts and circumstances
claimed  to  provide a basis for  determination  of or  termination  under  this
Agreement.


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      7.6  Date of  Termination.  For  purposes  of  this  Agreement,  "Date  of
Termination" shall mean the date of Death, Retirement or the date of termination
of employment specified in the Notice of Termination.

      7.7 Payments on Termination.  Upon termination of Dr. Deutsch's employment
by CAHS other than by reason of Dr. Deutsch's Death,  Disability,  Retirement or
for Cause, CAHS will pay to Dr. Deutsch the following  Severance (subject to any
applicable  payroll or other taxes  required to be withheld):  in the event such
termination,  one-twelfth  (1/12) of Dr. Deutsch's Basic Salary and Supplemental
Salary shall be paid monthly for a period covering twelve months  following such
termination.

      7.8  Termination by CAHS for Cause. In the event of the termination of Dr.
Deutsch's   employment  by  CAHS  for  Cause,  Dr.  Deutsch  or  his  estate  or
beneficiary,  as the case may be, shall  receive his Basic Salary to the Date of
Termination  and no other  amount  except as  required by law or by the terms of
employee welfare plans in which Dr. Deutsch was a participant.

      7.9  Termination by Death,  Retirement or Disability.  In the event of the
termination of Dr. Deutsch's employment by Retirement,  Death or Disability, Dr.
Deutsch or his estate or  beneficiary,  as the case may be,  shall  receive  his
Basic Salary through the Date of Termination.

8. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION BY EMPLOYEE

      8.1 Prior Medical Practice.  Dr. Deutsch represents that he is not subject
to any restrictive  covenant that would prevent his performance of the duties of
National Medical Director at CAHS as described above.

      8.2 Pending Patient-Related Litigation. Dr. Deutsch hereby represents that
to the  best of his  knowledge  and  belief,  he is not a party  to any  pending
professional liability or other patient-related litigation, that no such actions
have been  threatened,  that  there are no  proceedings  threatened  or  pending
against  Dr.  Deutsch  before any  professional  licensing  board,  and that Dr.
Deutsch is not aware of any state of facts which reasonably could be expected to
lead to any such litigation or proceeding.

      8.3 Prior Acts  Insurance  Coverage.  Dr. Deutsch has provided CAHS with a
certificate  of  insurance  as  evidence  of  adequate  professional   liability
insurance  to  insure  against  professional  liability  claims  arising  out of
occurrences prior to the Effective Date hereof and a copy of such certificate of
insurance is attached hereto.

      8.4  Indemnification.  Dr. Deutsh  hereby agrees to indemnify,  defend and
hold  harmless  CAHS from and against any and all claims,  losses,  liabilities,
damages (including,  without limitation,  compensatory and/or punitive damages),
costs and expenses (including,  without limitation,  reasonable  attorneys' fees
and  expenses)  incurred by CAHS as a result of any claim or action  relating to
Dr. Deutsch's practice of medicine prior to the Effective Date.


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      8.5 The foregoing  representations,  warranties and indemnification  shall
remain in effect throughout the Term and for a period of two (2) years following
the termination or expiration of this Agreement.

9. CONFIDENTIAL INFORMATION AND PROPRIETARY INTERESTS

      9.1  Acknowledgment  of  Confidentiality.   Dr.  Deutsch  understands  and
acknowledges that he may obtain  Confidential  Information  during the course of
his employment by CAHS. Dr. Deutsch further acknowledges that the services to be
rendered by him are of a special,  unique and extraordinary  character and that,
in  connection  with  such  services,   he  will  have  access  to  Confidential
Information vital to CAHS's and Affiliates' business.  Accordingly,  Dr. Deutsch
agrees that he shall not,  either during the Term or at any time within one year
after  the  Date of  Termination,  (i) use or  disclose  any  such  Confidential
Information  outside  CAHS and  Affiliates'  or (ii),  except as required in the
proper performance of his services hereunder,  remove or aid in the removal from
the  premises of CAHS or any  Affiliate,  any  Confidential  Information  or any
property or material relating thereto.

      The foregoing  confidentiality  provisions shall cease to be applicable to
any Confidential  Information  which becomes  generally  available to the public
(except  by reason of or as a  consequence  of a breach  by Dr.  Deutsch  of his
obligations under this Section 9).

      In the event Dr.  Deutsch is  required by law or a court order to disclose
any such  Confidential  Information,  he shall,  subject to the  requirements of
applicable law, promptly notify CAHS of such requirement and provide CAHS with a
copy of any  court  order  or of any law  which  in his  opinion  requires  such
disclosure  and, if CAHS so elects,  and if he is legally able to do so,  permit
CAHS an adequate  opportunity,  at its own expense, to contest such law or court
order.

      9.2 Delivery of Material.  Dr. Deutsch shall promptly, and without charge,
deliver to CAHS on the termination of his employment hereunder,  or at any other
time CAHS may so request,  all  memoranda,  notes,  records,  reports,  manuals,
computer disks,  videotapes,  drawings,  blueprints and other documents (and all
copies  thereof)  relating to the business of CAHS and the  Affiliates,  and all
property associated therewith, which he may possess or have under his control.

      9.3 Extension of Section 12. All of the  provisions of Section 12 shall be
deemed to be applicable to all Confidential Information to which Dr. Deutsch may
have  obtained  access or which he may have  invented  or  developed  during his
employment by CAHS or any Subsidiary.

10. DISPUTES AND REMEDIES

      10.1 Waiver Of Jury Trial.  Dr. Deutsch and CAHS hereby waive the right to
a trial by jury in the event of any dispute which arises under this Agreement.


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      10.2 Injunctive  Relief.  If Dr. Deutsch commits a breach, or threatens to
commit a breach,  of any of the  provisions  of Section  12, CAHS shall have the
following  rights and remedies (each of which shall be independent of the other,
and shall be  severally  enforceable,  and all of which shall be in addition to,
and not in lieu of, any other rights and remedies available to CAHS at law or in
equity):

            (i) the right and remedy to have the  provisions  of this  Agreement
      specifically  enforced by any court having equity  jurisdiction,  it being
      acknowledged by Dr. Deutsch that any such breach or threatened breach will
      or may cause  irrespirable  injury to CAHS and that money  damages will or
      may not provide an adequate remedy to CAHS; and

            (ii) the right and remedy to require Dr.  Deutsch to account for and
      pay over to CAHS all compensation,  profits, monies, increments, things of
      value or other benefits,  derived or received by Dr. Deutsch as the result
      of any acts or transactions constituting a breach of any of the provisions
      of Section 12 of this Agreement,  and Dr. Deutsch hereby agrees to account
      for and pay over  all  such  compensation,  profits,  monies,  increments,
      things of value or other benefits to CAHS.

      10.3 Partial Enforceability.  If any provision contained in Section 12, or
any part thereof,  is construed to be invalid or  unenforceable,  the same shall
not  affect  the   remainder  of  Dr.   Deutsch's   agreements,   covenants  and
undertakings,  or the other restrictions  which he has accepted,  in Section 12,
and the remaining such  agreements,  covenants,  undertakings  and  restrictions
shall be given the fullest possible effect, without regard to the invalid parts.

      10.4 Intention of Parties. It is expressly  understood and agreed that the
confidentiality  and proprietary  rights  provisions of this Agreement have been
accepted, and agreed to by Dr. Deutsch in contemplation of this Agreement. It is
therefore the specific intention of the parties,  any general  considerations of
public policy to the contrary  nothwithstanding,  that the provisions of Section
12 of this  Agreement  shall be enforced  as written  and to the fullest  extent
possible.

11. GOOD STANDING

      11.1 CAHS  represents  that it is a corporation  duly  organized,  validly
existing  and in good  standing  under the laws of the State of  Delaware.  CAHS
further  represents that it has full power and authority to conduct its business
and to enter into this Agreement.


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<PAGE>

      11.2 Dr. Deutsch represents that he presently meets the following criteria
and that he will  continue to maintain  compliance  with these  criteria  unless
waived by CAHS:

            (i)  Current  license  to  practice  medicine  in the State of Rhode
      Island;

            (ii) Full  compliance with all applicable  federal,  state and local
      laws,  regulations,  and  ethical  standards  governing  the  practice  of
      medicine generally; and

            (iii) High ethical  standards and in good  professional  standing in
      the community.

12. RESTRICTIONS

      12.1 Acknowledgement.  Dr. Deutsch acknowledges that his services provided
to CAHS under  this  Agreement  will  provide  him with  exposure  to  insurance
companies and other third-party payers of health care services.

      12.2 Restrictions.  Accordingly,  the parties hereby agree that during the
term of this  Agreement  and for a  period  of one (1)  year  from  the  date of
termination of this Agreement by either party (the  "Restrictive  Period"),  Dr.
Deutsch shall not directly or indirectly:

            (i) induce or attempt to influence any  organization  or entity that
      has  a  contractual   relationship  with  CAHS  at  any  time  during  the
      Restrictive  Period to terminate such  relationship or, to the extent such
      relationship  terminates for any reason, prevent or attempt to prevent the
      reestablishment of such relationship(s).

            (ii) solicit to provide  medical  management  services,  directly or
      indirectly  through  association with any entity that so solicits,  to any
      insurance  company or other third party payor of health care services with
      which  CAHS  has  any  such  contractual  relationship(s)  at the  time of
      termination  of  his  employment  hereunder  and at any  time  during  the
      remainder of the Restrictive Period; or

            (iii) for the purpose of conducting or providing services similar to
      those provided hereunder, engage, hire, offer to engage or hire, or employ
      or enter  into  business  with any  person  or entity  which  served as an
      employee or  independent  contractor of CAHS at the time of termination of
      his  employment  hereunder  and at any time  during the  remainder  of the
      Restrictive Period, whether as a joint venture, partnership,  corporation,
      or otherwise, without the prior written consent of CAHS.


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<PAGE>

      12.3  During the term of this  Agreement  and for a period of one (1) year
following the  termination  of Dr.  Deutsch's  Employment  by either party,  Dr.
Deutsch  agrees  that he will not in any way,  directly or  indirectly,  manage,
operate, control or accept employment or a consulting position with or otherwise
be connected  with, or own, or have any other  interest in or right with respect
to (other  than  through  ownership  of not more than five (5%)  percent  of the
outstanding shares of a corporation's  stock which is public traded or listed on
a national  securities  exchange)  a Care  Management  Company  (as  hereinafter
defined)  which  competes (or is deemed to compete by fulfilling  the conditions
stated in the following sentence) with CAHS or a subsidiary or affiliate of CAHS
in the Care Management Business (as hereinafter defined).

      For purposes of this Agreement,  (i) a "Care  Management  Business" means,
and is limited to,  utilization  review of  inpatient  and  outpatient  care and
managed care or disease management services for other entities such as insurance
companies and other payers;  (ii) a "Care  Management  Company"  means an entity
substantially  all of the  business  of which  consists  of the Care  Management
Business.

      The foregoing  restriction on competition  shall be limited to competition
in any State,  including  the District of Columbia,  in which CAHS or any of its
subsidiaries conducts its Care Management Business.

      12.4 For purposes of Section  12.3,  an  enterprise  shall be deemed to be
competing with CAHS' business  nothwithstanding the fact that it does not within
the one (1) year period  following the  termination of the  Employment  actually
compete  with  CAHS  if (i)  within  the  one  (1)  year  period  following  the
termination  of  the  Employment  the  enterprise  is  actively  developing  the
capability to compete with CAHS;  (ii) Dr. Deutsch has knowledge of such efforts
and (iii) within six (6) months of developing  such  capability  but in no event
later than six (6) months following one (1) year from the date of termination of
the Employment the enterprise actively competes with CAHS.

      Nothwithstanding any provision of this Agreement to the contrary,  nothing
in this  Agreement  shall be  interpreted  to restrict Dr. Deutsch from treating
clinical  patients and conducting the practice of medicine  (directly or through
another person or entity) during or after the term of this  Agreement,  or after
the term of this Agreement  (subject to Section 12.5) accepting  employment with
an insurance company or other third party payer,  hospital,  health  maintenance
organization,  other  facility  providing  care to  patients  or  continuing  or
renewing his relationship with Occupational Health and Rehabilitation and Health
Solutions.

      12.5  During the term of this  Agreement  and for a period of one (1) year
following the  termination  of Dr.  Deutsch's  Employment  by either party,  Dr.
Deutsch agrees that he will not seek or accept  employment,  an  affiliation,  a
consultancy or any other arrangement with any company, entity, employer,  health
plan or customer with which CAHS, at the time of  termination  of his employment
hereunder has or is negotiating a business  relationship  and about which he has
actual or contructive knowledge.


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<PAGE>

      12.6  Reasonableness of Restrictions.  The parties hereby acknowledge that
the restrictions contained in Section 12.2 above are reasonable and necessary to
protect  the  legitimate  interests  of CAHS  and  that  any  violation  of such
restrictions  would result in irreparable  injury to CAHS.  CAHS and Dr. Deutsch
acknowledge  that in the event of a violation of any such  restriction  which is
not  corrected  within  thirty  (30) days  thereof,  CAHS shall be  entitled  to
injunctive  relief  without  having to prove  actual  damages  or  immediate  or
irreparable  harm or to post a bond. CAHS shall also be entitled to an equitable
accounting  of all  earnings,  profits,  and other  benefits  arising  from such
violation,  which rights shall be cumulative and in addition to any other rights
or remedies  to which CAHS may be entitled at law or in equity.  In the event of
any such violation,  the Restrictive Period referred to in Section 12.2 shall be
extended  by  a  period  of  time  equal  to  that  period  beginning  with  the
commencement of any such violation and ending when such violation  finally shall
have been terminated in good faith.

13. GENERAL

      13.1 The headings of the Sections of this  Agreement  are for  convenience
only and shall not  affect  the  meanings  or  interpretations  of the  contents
thereof.

      13.2 This  Agreement is intended by the parties to replace the  Employment
Agreement among them dated as of July 1, 1995 ("Prior Employment  Agreement") as
of its  Effective  Date.  Commencing  the 28th day of  April,  1998,  the  Prior
Employment Agreement shall be terminated and of no effect,  except to the extent
of obligations thereunder that have accrued prior to such date and that have not
been satisfied as of such date.  Notwithstanding anything in this Section to the
contrary,  the parties  intend that the  "Addendum  to  Employment  Agreement of
Stephan D. Deutsch,  M.D.,  dated July 1, 1995" shall continue to remain in full
force and effect,  and that such Addendum shall be amended to substitute  "April
28, 1998" for each reference therein to "July 1, 1995."

      13.3 This  Agreement  represents  the complete  understanding  between the
parties,  and supersedes all prior  negotiations,  representation or agreements,
wheter written or oral, as to the matters  described  herein.  It may be amended
only by a written  instrument signed by the duly authorized  representatives  of
both parties. No requirement,  obligation, remedy or provision of this Agreement
shall be deemed to have been waived,  unless so waived expressly in writing, and
any waiver of any  provision  shall not be  considered  a waiver of any right to
enforce such provision thereafter.

      13.4 All notices  authorized  or required  herein  shall be in writing and
shall be sent by certified  mail,  return receipt  requested,  to the parties at
their respective addresses as set forth above:

      13.5  This  Agreement  shall be  governed  by the laws of the State of New
Jersey.

      13.6 For all purposes, this Agreement shall be deemed to have been drafted
by  both  parties  executing  it.  The  representations,  terms,  covenants  and
conditions  contained  herein  shall be deemed to be  material  and to have been
relied upon by the party or parties to whom they have been made.


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<PAGE>

      13.7 Without the prior written consent of the other party hereto,  neither
party may assign any of its rights or delegate any of its obligations hereunder.
Subject  to the  foregoing,  this  Agreement  inures to the  benefit  of, and is
binding upon, the successors and assigns of the parties hereto.

IN WITNESS WHEREOF,  the parties by their duly authorized  representatives  have
executed this Agreement under their respective hands and seals as of the day and
year first written above.


WITNESS:                               STEPHAN D. DEUTSCH, M.D.

______________________________         _______________________________________



ATTEST:                             CAREADVANTAGE, INC.

______________________________      By: ______________________________________
                                        Richard W. Freeman, M.D., Executive Vice
                                        President


ATTEST:                             CAREADVANTAGE HEALTH SYSTEMS, INC.

______________________________      By: ______________________________________
                                        Richard W. Freeman, M.D., Executive Vice
                                        President


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<PAGE>

                                    EXHIBIT A

              NATIONAL MEDICAL DIRECTOR DUTIES AND RESPONSIBILITIES

1.    Synthesis  of  products  into  Model   CareManagement   Program.   Primary
      responsibility   for   development   and  continued   enhancement  of  the
      CareAdvantage Care Management  Program,  including  assurance that Program
      can meet accreditation criteria, either directly or under delegate status,
      as appropriate for various CAI clients,  of URAC, NCQA or JCAHO, and other
      regulatory or accrediting agencies

2.    National  Recognition for  CareAdvantage.  Primary  responsibility (a) for
      establishment  of  and  development  of  role  of  CareAdvantage  National
      Advisory  Board,  and (b) for  maintenance of the  CareAdvantage  National
      Specialty  Physician  Panel, and (c) development and maintenance of formal
      relationships   with   appropriate   national   medical  and  professional
      societies,  such as the  American  College  of  Physicians,  the  Americal
      College of Obstetricians and Gynecologists,  etc., as well as liaison with
      medical schools

3.    Quality  management.   Primary  responsibility  (a)  for  development  and
      enhancement of career development  opportunities for CareAdvantage medical
      directors,  including  orientation and initial  training and for continued
      training  on  current  and  new  products,  and (b)  for  development  and
      application of quality  indicators to assure consistency of application of
      products and programs by CareAdvantage medical directors

4.    Selection of  combinations  of products and product  components  for model
      applications  for specific  market niches.  Secondary  responsibility,  in
      support of senior vice  president for  marketing and sales,  for selecting
      the  components of the Care  Management  Program to develop  optimal model
      care management programs marketable to each market niche,  including , but
      not  limited to,  large  insurers,  HMOs,  TPAs,  re-insurers,  integrated
      delivery systems, and large PPMs/MSOs


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