EXHIBIT 10.5
             
                               FIRST AMENDMENT TO
                                CREDIT AGREEMENT

     THIS FIRST  AMENDMENT TO CREDIT  AGREEMENT is made and dated as of November
23, 1998 (the  "First  Amendment")  among  SIERRA  HEALTH  SERVICES,  INC.  (the
"Company"),  the Banks now party to the Credit Agreement  referred to below, the
financial  institutions listed on the signature page hereof that are joining the
Credit  Agreement as Banks (the "New Banks") and BANK OF AMERICA  NATIONAL TRUST
AND SAVINGS ASSOCIATION, a national banking association, as Administrative Agent
(the "Agent"),  and amends that certain Credit Agreement dated as of October 30,
1998 (as further amended or modified from time to time, the "Credit Agreement").

                                    RECITALS

         WHEREAS,  the  Company has  requested  the Agent and the Banks to amend
certain  provisions  of the  Credit  Agreement,  and the Agent and the Banks are
willing to do so, on the terms and conditions specified herein;

         WHEREAS,  the New Banks  wish to be added to the  Credit  Agreement  as
Banks,  and the Company,  the Agent and the existing Banks are willing to permit
the New Banks to be so added;

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:

     1.  Terms.  All terms used  herein  shall have the same  meanings as in the
Credit Agreement unless otherwise defined herein.

         2. Amendment. The Credit Agreement is hereby amended as follows:

                  2.1      Amendments to Section 1.01.

                  (a)  There  shall  be  added  to  Section  1.01 of the  Credit
Agreement, in appropriate alphabetical sequence, the following definitions:

                           "First Union" shall mean First Union National Bank.

                           "Workers'   Compensation  Business"  shall  mean  the
                  business of underwriting workers'  compensation  insurance and
                  performing administrative functions related thereto.

                           "Workers'  Compensation  Event" shall mean failure by
                  the Company or any of its Workers'  Compensation  Subsidiaries
                  to comply in any  material  respect  with any of the terms and
                  provisions of any applicable Workers'

39251439.4 12199 1610P 96246459

                                                         1

<PAGE>



                  Compensation  Regulation  pertaining to the fiscal  soundness,
                  solvency or  financial  condition of the Company or any of its
                  Workers'  Compensation  Subsidiaries,   or  the  assertion  in
                  writing,  after the Closing Date,  by a Workers'  Compensation
                  Regulator  that  it  intends  to  take  administrative  action
                  against  the  Company  or  any of  its  Workers'  Compensation
                  Subsidiaries to revoke or modify any Governmental Approval of,
                  or to enforce  the fiscal  soundness,  solvency  or  financial
                  provisions  or  requirements  of  such  Workers'  Compensation
                  Regulations  against,  the  Company  or any  of  its  Workers'
                  Compensation  Subsidiaries,  if such action,  modification  or
                  enforcement  is reasonably  likely to have a Material  Adverse
                  Effect.

                           "Workers'  Compensation  Regulations"  shall mean all
                  Requirements  of Law  applicable to any Workers'  Compensation
                  Subsidiary  under  federal  or state law and any  regulations,
                  orders and directives  promulgated  or issued  pursuant to the
                  foregoing  in  connection  with the  operation  of its Workers
                  Compensation Business.

                           "Workers'  Compensation  Regulator"  means any Person
                  charged with the administration, oversight or enforcement of a
                  Workers'   Compensation    Regulation,    whether   primarily,
                  secondarily, or jointly.

                           "Workers'  Compensation  Subsidiary"  shall  mean any
                  current or future  Subsidiary of the Company that is primarily
                  involved in the Workers' Compensation Business.

                  (b) The second sentence  following the chart in the definition
of the term  "Applicable  Commitment  Fee Rate" in  Section  1.01 of the  Credit
Agreement is hereby amended and restated in its entirety to read as follows:

                           "Thereafter, the Applicable Commitment Fee Rate shall
                  be the actual Level  reflected on the  Compliance  Certificate
                  and shall be effective  from and  including  the date on which
                  the  Agent  receives  such   Compliance   Certificate  to  but
                  excluding  the  date on  which  the  Agent  receives  the next
                  Compliance Certificate;  provided,  however, that if the Agent
                  does not receive a Compliance Certificate by the date required
                  by subsection  7.02(b),  the  Applicable  Commitment  Fee Rate
                  shall,  effective as of such date, be Level 6 to but excluding
                  the date the Agent receives such  Compliance  Certificate  (on
                  which such date the  Applicable  Commitment  Fee Rate shall be
                  the actual Level reflected on such Compliance Certificate)."

                  (c) The second sentence  following the chart in the definition
of the term  "Applicable  Margin" in Section  1.01 of the  Credit  Agreement  is
hereby amended and restated in its entirety to read as follows:


39251439.4 12199 1610P 96246459

                                                         2

<PAGE>



                           "Thereafter,  the  Applicable  Margin  shall  be  the
                  actual Level reflected on the Compliance Certificate and shall
                  be effective  from and  including  the date on which the Agent
                  receives a Compliance Certificate to but excluding the date on
                  which  the Agent  receives  the next  Compliance  Certificate;
                  provided,  however,  that if the  Agent  does  not  receive  a
                  Compliance  Certificate  by the date  required  by  subsection
                  7.02(b),  the  Applicable  Margin shall,  effective as of such
                  date, be Level 6 to but excluding the date the Agent  receives
                  such Compliance Certificate (on which such date the Applicable
                  Margin shall be the actual Level  reflected on such Compliance
                  Certificate)."

                  (d)  Clause  (d)  of the  definition  of  the  term  "Eligible
Assignee" in Section 1.01 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

     "(d) any insurance company,  mutual fund or other financial  institution or
fund."

                  (e)  Clause (a) of the  definition  of the term  "Health  Care
Business"  in Section 1.01 of the Credit  Agreement is hereby  amended by adding
"including  without  limitation the provision of Medicare and Medicaid services"
at the end thereof.

                  (f) The  definition of the term "HMO Texas" in Section 1.01 of
the Credit  Agreement is hereby  amended and restated in its entirety to read as
follows:

                  "HMO Texas"  means Texas Health  Choice L.C., a Texas  limited
         liability  company,  formerly  known as HMO  Texas,  L.C.,  which is an
         indirect Subsidiary of the Company.

                  (g) The definition of the term "Honor Date" in Section 1.01 of
the Credit  Agreement  is hereby  amended by deleting  "subsection  3.03(b)" and
replacing it with "subsection 3.03(c)".

                  (h) The  definition  of the term  "L/C-Related  Documents"  in
Section 1.01 of the Credit  Agreement is hereby  amended by adding "the Existing
BofA Letters of Credit," after "Letters of Credit," in the first line thereof.

                  (i) The definition of the term "Kaiser Acquisition Agreements"
in Section 1.01 of the Credit  Agreement  is hereby  amended and restated in its
entirety to read as follows:

                           "Kaiser  Acquisition  Agreements"  means that certain
                  Asset Sale and Purchase  Agreement  dated June 5, 1998 between
                  PMAT and HMO Texas,  as amended,  that certain  Asset Sale and
                  Purchase  Agreement  dated June 5, 1998,  as amended,  between
                  Kaiser-Texas and HMO Texas and that certain Master

39251439.4 12199 1610P 96246459

                                                         3

<PAGE>



                  Sale  and  Purchase  Agreement  dated  June  5,  1998  between
                  Kaiser-Texas and HMO Texas, as amended.

                  (j) The  definition  of the term  "Majority  Banks" in Section
1.01 of the Credit  Agreement is hereby  amended and restated in its entirety to
read as follows:

                           "Majority  Banks"  means  at any time  that  BofA and
                  First  Union shall  collectively  hold in excess of 50% of the
                  Commitments,  Banks  holding  in  excess  of 75%  of the  then
                  aggregate unpaid principal amount of the Loans, or, if no such
                  principal amount is then  outstanding,  Banks having in excess
                  of 75% of the  Commitments;  at any time  that  BofA and First
                  Union  shall  collectively  hold in  excess  of  42.5%  of the
                  Commitments  but not more than 50% of the  Commitments,  Banks
                  holding  in  excess  of 66 2/3% of the then  aggregate  unpaid
                  principal amount of the Loans, or, if no such principal amount
                  is then outstanding,  Banks having in excess of 66 2/3% of the
                  Commitments;  and at any time that BofA and First  Union shall
                  collectively  hold  42.5%  or less of the  Commitments,  Banks
                  holding  in  excess  of  60%  of  the  then  aggregate  unpaid
                  principal amount of the Loans, or, if no such principal amount
                  is then  outstanding,  Banks  having  in  excess of 60% of the
                  Commitments.

                  2.2      Amendment to Section 2.07.

                  (a) The first  sentence  of clause (c) of Section  2.07 of the
Credit Agreement is hereby amended by inserting "excluding sales or dispositions
in  the  ordinary  course  of  business  by the  Company  of  securities  in its
investment  portfolio"  immediately  after "in the existing lines of business of
the Company" appearing in the eleventh line thereof.

                  2.3      Amendment to Section 3.01.

                  (a) The first  sentence  of clause (a) of Section  3.01 of the
Credit  Agreement is hereby  amended by inserting "to the day thirty days prior"
immediately after "Closing Date" in the third line thereof.

                  2.4      Amendments to Section 3.03.

                  (a)  Clause (b) of Section  3.03 of the  Credit  Agreement  is
hereby amended by deleting "subsection 3.3(a)" and replacing it with "subsection
3.03(a)" in the second line thereof.

                  2.5      Amendments to Section 3.06.

                  (a) Clause  (iii) of Section  3.06 of the Credit  Agreement is
hereby  amended  by adding  "(including  without  limitation  any  Bank)"  after
"Person" in the sixth line thereof.


39251439.4 12199 1610P 96246459

                                                         4

<PAGE>



                  2.6      Amendments to Section 5.01.

                  (a)  Clause (i) of Section  5.01 of the  Credit  Agreement  is
hereby  amended by adding "and the  collateral  thereunder has been released" to
the end thereof.

                  2.7      Amendments to Section 6.01.

                  (a)  Clause (d) of Section  6.01 of the  Credit  Agreement  is
hereby amended by adding "including without limitation all Workers' Compensation
Regulations," after "Requirements of Law" in the first line thereof.

                  2.8      Amendments to Section 6.02.

                  (a)  Clause (c) of Section  6.02 of the  Credit  Agreement  is
hereby amended by adding "including without limitation all Workers' Compensation
Regulations," after "Requirement of Law" in the first line thereof.

                  2.9      Amendments to Section 6.05.

                  (a)  Clause (a) of Section  6.05 of the  Credit  Agreement  is
hereby  amended  by adding "or  impair  the Banks  ability to effect  rights and
remedies" to the end thereof.

                  2.10     Amendments to Section 6.07.

                  (a)  Clause (a) of Section  6.07 of the  Credit  Agreement  is
hereby  amended by deleting "the  requirements  of all applicable  laws,  rules,
regulations  and orders of every  governmental  authority" and replacing it with
"Requirements of Law of every Governmental Authority".

                  2.11     Amendments to Section 6.21.

                  (a) Section 6.21 of the Credit  Agreement is hereby amended by
adding "and the Kaiser  Acquisition  Agreements"  after "Loan  Documents" in the
third line  thereof  and adding "or the  Kaiser  Acquisition  Agreements"  after
"Closing Date)" in the ninth line thereof.

                  2.12     Amendments to Section 6.23.

                  (a) Section 6.23 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

     "6.23  Licensing,  Etc.  Each HMO  Subsidiary  maintains  in full force and
effect  (i)  all  licenses  and  certifications  required  pursuant  to any  HMO
Regulation; (ii) all certifications and authorizations necessary to ensure that

39251439.4 12199 1610P 96246459

                                                         5

<PAGE>



                  each   of  the   HMO   Subsidiaries   is   eligible   for  all
                  reimbursements  available  under  the HMO  Regulations  to the
                  extent  applicable  to HMOs  of  their  type;  and  (iii)  all
                  licenses, permits,  authorizations and qualifications required
                  under the HMO  Regulations in connection with the ownership or
                  operation  of HMOs;  except  where the failure to maintain the
                  items  described in any of the  preceding  three clauses would
                  not have a Material Adverse Effect. Each Workers' Compensation
                  Subsidiary maintains in full force and effect (i) all licenses
                  and   certifications   required   pursuant  to  any   Workers'
                  Compensation  Regulation;  and  (ii)  all  licenses,  permits,
                  authorizations and qualifications  required under the Workers'
                  Compensation  Regulations in connection  with the ownership or
                  operation of a Workers'  Compensation  Business;  except where
                  the  failure to  maintain  the items  described  in any of the
                  preceding  three  clauses  would not have a  Material  Adverse
                  Effect."

                  2.13     Amendments to Section 6.25.

                  (a) The first sentence of Section 6.25 of the Credit Agreement
is hereby  amended  by adding  "or Event of  Default"  after  "Material  Adverse
Effect" in the tenth line thereof.

                  (b)  The  second  sentence  of  Section  6.25  of  the  Credit
Agreement  is hereby  amended by adding the  following  clause  prior to the end
thereof:

     ", all to the extent  necessary  to insure that any such  failure  will not
result in a Material Adverse Effect."

                  2.14     Amendments to Section 7.02.

                  (a)  Clauses  (d),  (e) and (f) of Section  7.02 of the Credit
Agreement are hereby amended and restated in their entirety to read as follows:

                           "(d)  promptly  following  the receipt of the same, a
                  copy of each notice relating to the loss or threatened loss by
                  the Company, any Workers'  Compensation  Subsidiary or any HMO
                  Subsidiary  of  any  material  operating  permit,  license  or
                  certification  by any Workers'  Compensation  Regulator or any
                  HMO Regulator;

                           (e) promptly  following the receipt of the same,  all
                  material   correspondence  received  by  the  Company  or  any
                  Subsidiary (other than  correspondence in draft form) from (i)
                  an HMO  Regulator  which  asserts  that the Company or any HMO
                  Subsidiary  is not in  substantial  compliance  with  any  HMO
                  Regulation or which threatens the taking of any action against
                  the Company or any Subsidiary  under any HMO Regulation  which
                  would reasonably be expected to have a Material Adverse Effect
                  or (ii) a Workers'

39251439.4 12199 1610P 96246459

                                                         6

<PAGE>



                  Compensation  Regulator  which asserts that the Company or any
                  Workers'   Compensation   Subsidiary  is  not  in  substantial
                  compliance with any Workers' Compensation  Regulation or which
                  threatens the taking of any action  against the Company or any
                  Subsidiary  under any Workers'  Compensation  Regulation which
                  would  reasonably  be  expected  to  have a  Material  Adverse
                  Effect;

                           (f)  from  time to time  upon  receipt  of a  written
                  request  by the  Agent or any Bank  specifying  in  reasonable
                  detail the types of documents  to be  provided,  copies of any
                  and all statements, audits, studies or reports submitted by or
                  on behalf of (i) the Company or any HMO  Subsidiary to any HMO
                  Regulator  or (ii) the Company and any  Workers'  Compensation
                  Subsidiary to any Workers'  Compensation  Regulator (except to
                  the extent that the delivery of such documents could result in
                  the waiver by the Company of any privilege it might have under
                  applicable law); and"

                  2.15     Amendments to Section 7.08.

                  (a) Section 7.08 of the Credit  Agreement is hereby amended by
adding ", all Workers' Compensation  Regulations" after "HMO Regulations" in the
fifth line thereof.

                  2.16     Amendments to Section 7.16.

                  (a) There shall be added to the Credit Agreement a new section
7.16 reading in its entirety as follows:

                           7.16  Accreditation.  The Company will use reasonable
                  commercial  efforts to (i) maintain the current  accreditation
                  by the National  Committee for Quality Assurance  ("NCQA") for
                  Health Plan of Nevada at the "Full  Accreditation"  level, and
                  (ii) obtain within a reasonable  period of time and thereafter
                  maintain  accreditation  by  NCQA  for  its  Dallas  area  HMO
                  operations  at  the  "Provisional  Accreditation",   "One-Year
                  Accreditation" or "Full Accreditation" levels.

                  2.17     Amendments to Section 8.02.

                  (a) Subsection (c) of Section 8.02 of the Credit  Agreement is
hereby  amended  by  deleting  the date  "December  31,  1997" and  substituting
therefor the date "November 2, 1998".

                  (b) Subsection (d) of Section 8.02 of the Credit  Agreement is
hereby amended and restated to read in its entirety as follows:

     "(d)  dispositions not otherwise  permitted  hereunder of assets (including
all, but not less than all, of the capital stock of any Subsidiary) owned by

39251439.4 12199 1610P 96246459

                                                         7

<PAGE>



         the Company or any  Subsidiary  as of November 2, 1998,  which are made
         for  fair  market  value;  provided,  that  (i)  at  the  time  of  any
         disposition,  no Event of Default shall exist or shall result from such
         disposition, (ii) the aggregate sales price from such disposition shall
         be paid in cash, (iii) the aggregate value of all assets so sold by the
         Company and its  Subsidiaries  prior to the Revolving Loan  Termination
         Date,  together,  shall not  exceed  10% of the  Consolidated  Tangible
         Assets of the Company and its Subsidiaries as of November 2, 1998."

                  2.18     Amendments to Section 8.17.

                  (a)  Subsections  (iii) and (iv) of Section 8.17 of the Credit
Agreement are hereby re-numbered as subsections (iv) and (v).

                  (b) A new  subsection  (iii) shall be added to Section 8.17 of
the Credit Agreement reading in its entirety as follows:

                  "(iii) if the aggregate value of all consideration  (including
         Indebtedness  assumed by the Company and its Subsidiaries in connection
         therewith) for any single Acquisition exceeds $25,000,000,  the Company
         shall have obtained the prior written approval of the Majority Banks."

                  2.19     Amendments to Section 9.02.

                  (a)  Clause (a) of Section  9.02 of the  Credit  Agreement  is
hereby amended by adding "and participate in Letters of Credit" after "Loans" in
the first line thereof and replacing  "commitments"  with  "Commitments"  in the
third line thereof.

                  2.20     Amendments to Section 10.07.

                  (a) Section 10.07 of the Credit Agreement is hereby amended by
deleting "solely" after "resulting" in line 9 thereof.

                  2.21     Amendments to Section 11.01.

                  (a)  Clause (a) of Section  11.01 of the Credit  Agreement  is
hereby  amended by replacing  "Section  8.02" with "Section  9.02" in the second
line thereof.

                  (b)  Clause (b) of Section  11.01 of the Credit  Agreement  is
hereby amended by adding the following immediately prior to the end thereof:

     "or  postpone  or delay  any date set  forth  in  Section  2.07(b)  for the
reduction of the Commitments"


39251439.4 12199 1610P 96246459

                                                         8

<PAGE>



                  (c)  There  shall  be  added to  Section  11.01 of the  Credit
Agreement a new Clause (f) reading in its entirety as follows:

     "(f) release any portion of the Pledged Collateral;"

                  2.22     Amendment of Schedules.

                  (a) Schedule  2.01 of the Credit  Agreement is hereby  amended
and restated to read in its entirety as set forth on Schedule 2.01 hereto.

                  (b) Schedule 5.01(g) of the Credit Agreement is hereby amended
and restated to read in its entirety as set forth on Schedule 5.01(g) hereto.

                  (c) Schedule  11.02 of the Credit  Agreement is hereby amended
and restated to read in its entirety as set forth on Schedule 11.02 hereto.

                  2.23     Addition of New Banks.

                  (a) Upon the  effectiveness of this First  Amendment,  each of
the New Banks shall (i) be a party to the Credit  Agreement;  (ii) assume all of
the  rights  and  obligations  of a  Bank  under  the  Credit  Agreement  with a
Commitment  in the amount set forth  opposite  such Bank's name in Schedule 2.01
attached hereto; and (iii) be secured by the Collateral.  The Commitments of the
New Banks and the revised Commitments of the existing Banks will be effective as
of November 25, 1998 (the "New Commitment  Effective  Date").  As of the date of
this First Amendment, there are three outstanding Borrowings of LIBOR Rate Loans
(the  "Outstanding  Loans").  It is the intention of the parties that on the New
Commitment  Effective Date the New Banks shall  purchase  assignments in each of
the Outstanding Loans in an amount equal to each such Bank's respective Pro Rata
Share.  The interest rate payable by the Company on the Outstanding  Loans shall
remain unchanged;  however,  the interest rate distributable to the New Banks on
their  portion of the New Loans shall be equal to the LIBOR Rate for an Interest
Period of three months,  determined as of November 23, 1998, plus the Applicable
Margin for LIBOR Rate Loans. On the New Commitment Effective Date, each New Bank
shall pay to the Agent (for delivery to BofA and First Union) its Pro Rata Share
of the aggregate  principal  amount of the Outstanding  Loans. The obligation of
each New Bank to so provide  its  purchase  price to the Agent shall be absolute
and  unconditional  and shall not be affected by the  occurrence of a Default or
Event of  Default.  Each New Bank that has  provided  to the Agent the  purchase
price due for its  assignment in such Loans shall  thereupon  acquire a pro rata
participation,  to the  extent of such  payment,  in the claim of BofA and First
Union against the Company for principal and shall share,  in accordance with its
Pro Rata Share,  in any  principal  payment  made by the Company with respect to
such claim.

                  (b) From and after the New Commitment  Effective Date, the New
Banks  shall be  entitled  to  their  Pro Rata  Share of all  interest  and fees
thereafter accruing under this

39251439.4 12199 1610P 96246459

                                                         9

<PAGE>



Credit  Agreement  (including,  without  limitation,  interest  on each such New
Bank's Pro Rata Share of the  Outstanding  Loans).  All Loans made after the New
Commitment  Effective  Date shall be made by the Banks  pursuant to the Pro Rata
Shares set forth in Schedule 2.01 attached hereto.

                  (c) Each of the New Banks hereby (i)  warrants and  represents
that it is authorized to become a party to the Credit  Agreement;  (ii) appoints
and authorizes the Agent to take such action,  exercise such powers, and perform
such duties  under the Credit  Agreement  as are  specifically  delegated  to or
required of the Agent by the terms of the Credit  Agreement,  together with such
other powers as are reasonably incidental thereto; and (iii) agrees that it will
abide and be bound by all of the terms,  covenants and  agreements,  and perform
all of the obligations,  which by the terms of the Credit Agreement are required
to be abided and  performed  by it as a Bank and shall be entitled to all of the
rights,  benefits and  privileges  available or accruing to Banks under the Loan
Documents.

         3. Representations and Warranties.  The Company represents and warrants
to the Agent and the Banks that, on and as of the date hereof,  and after giving
effect to this First Amendment:

                  3.1 Authorization.  The execution, delivery and performance by
the Company of this First  Amendment  has been duly  authorized by all necessary
corporate action,  and this First Amendment has been duly executed and delivered
by the Company.

                  3.2 Binding Obligation.  This First Amendment  constitutes the
legal,  valid and binding obligation of the Company,  enforceable  against it in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy,  insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.

                  3.3 No Legal Obstacle to Amendment.  The  execution,  delivery
and performance of this First Amendment will not (a) contravene the Organization
Documents  of the  Company;  (b)  constitute  a  breach  or  default  under  any
contractual  restriction  or  violate  or  contravene  any  law or  governmental
regulation  or court decree or order  binding on or affecting  the Company which
individually or in the aggregate does or could  reasonably be expected to have a
Material Adverse Effect; or (c) result in, or require the creation or imposition
of, any Lien on any of the Company's properties. No approval or authorization of
any  governmental  authority  is required to permit the  execution,  delivery or
performance  by the  Company  of  this  First  Amendment,  or  the  transactions
contemplated hereby.

                  3.4  Incorporation  of Certain  Representations.  After giving
effect to the terms of this First Amendment,  the representations and warranties
of the  Company  set forth in Article VI of the  Credit  Agreement  are true and
correct in all respects on and as of the date hereof as though made on and as of
the  date  hereof,  except  as to such  representations  made  as of an  earlier
specified date.

39251439.4 12199 1610P 96246459

                                                        10

<PAGE>




                  3.5 Default.  No Default or Event of Default  under the Credit
Agreement has occurred and is continuing.

         4. Conditions, Effectiveness. The effectiveness of this First Amendment
shall be subject to the  compliance  by the Company with its  agreements  herein
contained,  and to the delivery of the  following to Agent in form and substance
satisfactory to Agent of the following on or before November 30, 1998:

                  4.1  Authorized  Signatories.  A  certificate,  signed  by the
Secretary  or an  Assistant  Secretary of the Company and dated the date of this
First  Amendment,  as to the  incumbency of the person or persons  authorized to
execute  and  deliver  this First  Amendment  and any  instrument  or  agreement
required hereunder on behalf of the Company.

                  4.2  Organization  Documents.  The articles or  certificate of
incorporation and the bylaws of each Pledgor Subsidiary as in effect on the date
of this First  Amendment,  and resolutions  authorizing the  transactions by the
Pledgor Subsidiaries contemplated by the Credit Agreement, each certified by the
Secretary or Assistant  Secretary of the each Pledgor  Subsidiary as of the date
of this First Amendment.

                  4.3  Pledge  Agreement  Affirmations.  The  Agent  shall  have
received  affirmation letters in respect of the Pledge Agreement,  substantially
in the form of Exhibit A, from each Pledgor Subsidiary.

                  4.4  Notes.  The Agent  shall  have  received  for each  Bank,
including  without  limitation each New Bank, a duly executed Note in the amount
of such Bank's Commitment.

                  4.5  Regulatory  Certificate.  A certificate  of a Responsible
Officer  on  behalf of each of the  Workers'  Compensation  Subsidiaries  to the
effect  that such  Workers'  Compensation  Subsidiary  is in  compliance  in all
material respects with the requirements of all applicable Workers'  Compensation
Regulations and with all other Requirements of Law.

                  4.6 Reliance Letters. Letters from Morgan, Lewis & Bockius and
the  internal  counsel of the Company  authorizing  the New Banks to rely on the
opinions delivered pursuant to the Credit Agreement.

                  4.7 Other  Evidence.  Such other  evidence with respect to the
Company or any other person as the Agent or any Bank may  reasonably  request to
establish the consummation of the transactions  contemplated  hereby, the taking
of all corporate  action in connection  with this First Amendment and the Credit
Agreement and the compliance with the conditions set forth herein.


39251439.4 12199 1610P 96246459

                                                        11

<PAGE>



         5.       Miscellaneous.

                  5.1  Effectiveness  of the  Credit  Agreement  and the  Notes.
Except as hereby  expressly  amended,  the Credit  Agreement and the Notes shall
each remain in full force and effect,  and are hereby  ratified and confirmed in
all respects on and as of the date hereof.

                  5.2 Waivers.  This First  Amendment  is limited  solely to the
matters  expressly  set forth  herein and is  specific in time and in intent and
does not constitute, nor should it be construed as, a waiver or amendment of any
other term or condition, right, power or privilege under the Credit Agreement or
under any  agreement,  contract,  indenture,  document or  instrument  mentioned
therein;  nor does it preclude or prejudice any rights of the Agent or the Banks
thereunder, or any exercise thereof or the exercise of any other right, power or
privilege,  nor shall it require the  Majority  Banks to agree to an  amendment,
waiver or consent for a similar  transaction or on a future occasion,  nor shall
any future waiver of any right, power, privilege or default hereunder,  or under
any  agreement,  contract,  indenture,  document or instrument  mentioned in the
Credit Agreement,  constitute a waiver of any other right,  power,  privilege or
default of the same or of any other term or provision.

                  5.3 Counterparts.  This First Amendment may be executed in any
number of  counterparts,  and all of such  counterparts  taken together shall be
deemed to constitute one and the same  instrument.  All provisions of this First
Amendment  shall become  effective when the Company,  the Agent and the Majority
Banks shall have signed a copy hereof and the same shall have been  delivered to
the Agent.

     5.4 Governing Law. This First  Amendment shall be governed by and construed
in accordance with the laws of the State of California.



39251439.4 12199 1610P 96246459

                                                        12

<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed and delivered as of the date first written above.

                          SIERRA HEALTH SERVICES, INC.


                          By:
                          Name:
                          Title:

                          BANK OF AMERICA NATIONAL TRUST AND
                          SAVINGS ASSOCIATION, as Administrative
                          Agent


                          By:
                          Name:
                          Title:


                          BANK OF AMERICA NATIONAL TRUST AND
                          SAVINGS ASSOCIATION, as a Bank


                          By:
                          Name:
                          Title:


                         FIRST UNION NATIONAL BANK, as a Bank


                         By:
                         Name:
                         Title:



39251439.4 12199 1610P 96246459

                                                        13

<PAGE>

                                     CREDIT LYONNAIS NEW YORK BRANCH, as

                                     a New Bank


                                                     By:
                                                     Name:
                                                     Title:


                                     THE FIRST NATIONAL BANK OF CHICAGO,
                                     as a New Bank


                                                     By:
                                                     Name:
                                                     Title:


                       NORWEST BANK NEVADA N.A., as a New
                                                     Bank


                                                     By:
                                                     Name:
                                                     Title:


                      UNION BANK OF CALIFORNIA, N.A., as a
                      New Bank


                                                     By:
                                                     Name:
                                                     Title:




39251439.4 12199 1610P 96246459

                                                        14

<PAGE>



                                  SCHEDULE 2.01

                         COMMITMENTS AND PRO RATA SHARES

<TABLE>

<CAPTION>
Bank                             Commitment                Pro Rata Share

Bank of America National
Trust and Savings
<S>                              <C>                        <C>          
Association                      $ 66,666,667               33.333333333%

First Union National Bank        $ 53,333,333               26.666666667%

Credit Lyonnais
New York Branch                  $ 20,000,000               10.000000000%

The First National Bank
of Chicago                       $ 20,000,000               10.000000000%

Norwest Bank Nevada N.A.         $ 20,000,000              10.000000000%

Union Bank of California, N.A.   $ 20,000,000              10.000000000%

                  TOTAL          $200,000,000              100%
</TABLE>



39251439.4 12199 1610P 96246459


<PAGE>



                                                  SCHEDULE 11.02

                                      OFFSHORE AND DOMESTIC LENDING OFFICES,
                                               ADDRESSES FOR NOTICES


BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
         as Administrative Agent

Notices (other than Borrowing Notices and Notices of Conversion/Continuation):

Bank of America National Trust
and Savings Association
Agency Management Services #20529
555 South Flower Street, 11th Floor
Los Angeles, CA 90071

Attention:        Ms. Gina Meador
                  Vice President
                  Telephone: 213/228-5245
                  Facsimile: 213/228-2299

AGENT'S PAYMENT OFFICE:

Notices for Extensions of Credit and Conversion/Continuation:

Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
1850 Gateway Boulevard, Fifth Floor
Concord, CA 94520

Attention:        Kathy Eddy
                  Telephone: 925/675-8458
                  Facsimile: 925/675-8500


39251439.4 12199 1610P 96246459


<PAGE>



BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
         as a Bank

Domestic and Offshore Lending Office:

GPO-Domestic Account Administration #5583
The Harnor Building, 19th Floor
333 S. Beaudry Ave.
Los Angeles, CA 90017-1486

Attention:        Sandra Ibarra
                  Telephone: 213/345-6536
                  Facsimile: 213/345-6550

Notices (other than Borrowing notices and Notices of Conversion/Continuation):

Bank of America National Trust
and Savings Association
Health Care Finance #9173
555 South Flower Street, 11th Floor
Los Angeles, CA 90071

Attention:        J. Gregory Seibly
                  Vice President
                  Telephone: 213/228-2953
                  Facsimile: 213/228-2756

FIRST UNION NATIONAL BANK

Domestic and Offshore Lending Office:

One First Union Center
Charlotte, North Carolina 28288

Attention:        Sue Patterson
                  Telephone: 704/374-7121
                  Facsimile: 704/374-6537

with a copy of all Notices (other
than Borrowing Notices or Notices
of Conversion/Continuation):


39251439.4 12199 1610P 96246459


<PAGE>



First Union National Bank
One First Union Center
Charlotte, North Carolina 28288

Attention:        Valerie Cline
                  Telephone: 704/383-6237
                  Facsimile: 704/383-9144

CREDIT LYONNAIS NEW YORK BRANCH

Domestic and Offshore Lending Office:

1301 Avenue of the Americas
New York, New York 10019

Attention:        Kenia A. Perez
                  Telephone: 212/261-7788
                  Facsimile: 212/261-3440

THE FIRST NATIONAL BANK OF CHICAGO

Domestic and Offshore Lending Office:

One First National Plaza
Chicago, Illinois 60670

Attention:        Ken Fecko
                  Telephone: 312/732-4616
                  Facsimile: 312-732-4303

NORWEST BANK NEVADA N.A.

Domestic and Offshore Lending Office:

3300 West Sahara Avenue
Las Vegas, Nevada 89102

Attention:        Sue Norton
                  Telephone: 702/765-3180
                  Facsimile: 702/765-3888





39251439.4 12199 1610P 96246459


<PAGE>



UNION BANK OF CALIFORNIA, N.A.

Domestic and Offshore Lending Office:

Commercial Customer Service Unit
1980 Saturn Street
Monterey Park, CA 91755

Attention:        Gohar Karapetyan
                  Telephone: 323/720-2679
                  Facsimile: 323/724-6198

39251439.4 12199 1610P 96246459


<PAGE>



                                  EXHIBIT A to
                                 First Amendment
                               to Credit Agreement



                                                 November 23, 1998





Sierra Health Services, Inc.
Sierra Medical Management, Inc.
Prime Holdings, Inc.
c/o Sierra Health Services, Inc.
2724 North Tenaya Way
Las Vegas, Nevada 89128

         Re:      Sierra Health Services, Inc.

Gentlemen:

         Please refer to (1) the Credit Agreement,  dated as of October 30, 1998
(the "Credit  Agreement"),  by and among Sierra  Health  Services,  Inc., as the
Borrower, the commercial lending institutions party thereto  (collectively,  the
"Lenders") and Bank of America National Trust and Savings Association,  as agent
(herein,  in such  capacity,  called the "Agent") and (2) the Pledge  Agreements
dated  October 30, 1998 from each of the  addressees in favor of the Lenders and
the Agent (the "Pledge Agreements"). Pursuant to an amendment dated of even date
herewith,  a copy of which  is  attached  hereto,  certain  terms of the  Credit
Agreement were amended.  We hereby request that you (i) acknowledge and reaffirm
all of your  obligations and  undertakings  under your Pledge Agreement and (ii)
acknowledge  and agree that your Pledge  Agreement  is and shall  remain in full
force and effect in accordance with the terms thereof.

         Please indicate your agreement to the foregoing by signing in the space
provided below, and returning the executed copy to the undersigned.

                         BANK OF AMERICA NATIONAL TRUST
                            AND SAVINGS ASSOCIATION,
                            as Agent


                        By:______________________________

39251439.4 12199 1610P 96246459


<PAGE>


                                                        Title:




Acknowledged and Agreed to
as of November 20, 1998

SIERRA HEALTH SERVICES, INC.
SIERRA MEDICAL MANAGEMENT, INC.
PRIME HOLDINGS, INC.


By:____________________________
   Its:________________________



39251439.4 12199 1610P 96246459


<PAGE>