EXHIBIT 10.7(10)

                              EMPLOYMENT AGREEMENT

     This Agreement is made this day of November 20, 1998, by and between SIERRA
HEALTH SERVICES,  Inc., a Nevada Corporation,  of Las Vegas, Nevada (hereinafter
referred to as  "Employer"),  and Paul H. Palmer ,  (hereinafter  referred to as
"Employee").

     WITNESSETH  WHEREAS,  Employer is a publicly  traded company engaged in the
business of providing managed health care services through subsidiary companies;

     WHEREAS,  Employee has expertise and experience in providing managed
health  care  services;  and,

     WHEREAS,  Employee  has made and is  expected  to
continue to make a major contribution to the profitability, growth and financial
strength of Employer;

     NOW,  THEREFORE,  in  consideration  of the mutual  promises and agreements
hereinafter set forth, Employer and Employee agree as follows:

                                    ARTICLE I
                          EMPLOYMENT/DUTIES AND POWERS

     1. Employer hereby  employs,  engages and hires Employee as Vice President,
Treasurer and Chief  Financial  Officer , and Employee hereby accepts and agrees
to such hiring,  engagement and employment,  subject to the general  supervision
and direction of Employer.

     2.  Employee  shall  perform  such  duties  as are  assigned  by the CEO of
Employer



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<PAGE>



or  his/her  designee,  and  shall at all  times  faithfully  and to the best of
his/her  ability  perform all the duties that may be required of Employee to the
reasonable  satisfaction of Employer.  Employee shall exercise only those powers
for signing  contracts and conveyances in the ordinary course of business as are
expressly  authorized by Employer's CEO or the  appropriate  Board of Directors.
Employee  further  agrees to  participate  in and assist in the  development  of
quality improvement programs offered by Employer.

                                   ARTICLE II
                     TERM OF EMPLOYMENT - TERM OF AGREEMENT

     1.  The  term  of  employment  governed  by  this  Agreement  shall  be for
approximately  a 3 year  period  starting  November  20,  1998  and  terminating
December 31,2001 subject,  however, to prior termination as hereinafter provided
in Article VII. Unless earlier terminated by the mutual agreement of the parties
hereto,  this Agreement shall terminate at December 31, 2001 or, if Employee has
become  entitled  to  any  benefit  under  Article  VII  due to  termination  of
employment  on or before  December  31,  2001,  at such date as Employer  has no
further obligations to Employee under Article VII; provided,  however,  that the
provisions  of Article V and  Article VI (and this  clause of Article  II) shall
survive any termination of this Agreement.





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                                   ARTICLE III
                             COMPENSATION AND REVIEW

     1. Employer  shall pay Employee and Employee  shall accept from Employer as
payment for  Employee's  services  hereunder,  compensation  in the form of base
salary in the amount as set forth in Attachment A of this Agreement,  payable at
such  times as are deemed  appropriate  by  Employer,  but not less than twice a
month, and other compensation payable under this Agreement.

     2. (a) Employer shall  reimburse  Employee for all necessary and reasonable
business  expenses  incurred by Employee while performing  services  pursuant to
Employer's direction.

     (b)  Employee  agrees to maintain  adequate  records of  expenses,  in such
detail as Employer may reasonably request.

     3. (a) Employee  shall also be eligible for those  Employee  fringe benefit
programs,  bonus plans,  and stock  option plans as are made  available to other
employees of Employer at the same  organizational  level, and as approved by the
Board of Directors.

     (b) Except for Employee's vested benefits under the Supplemental  Executive
Retirement Plan ("SERP"),  Employer may, at any time and at its sole discretion,
amend any fringe benefit  programs,  bonus  programs,  or stock option  programs
without  prior notice to Employee even though such an amendment may decrease the
future benefits available under said programs.



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<PAGE>



     4.  Employee's  performance  shall be reviewed at least  annually  based on
established job duties,  goals and objectives and other reasonable  standards as
deemed necessary and appropriate by Employer.

                                   ARTICLE IV

                                OTHER EMPLOYMENT

     Employee  shall devote all of his time,  attention,  knowledge,  and skills
solely to the business and interest of Employer,  unless otherwise authorized by
Employer,  and  Employer  shall be entitled to all of the income,  benefits,  or
profits arising from or incident to all work, work  associations,  services,  or
advice of Employee, unless otherwise authorized in writing by Employer. Employee
shall not,  during the term hereof,  be  interested  in any manner,  as partner,
officer,  director,  advisor,  employee  or in any other  capacity  in any other
business  similar to  Employer's  business  or any allied  trade,  or obtain any
interest  adverse to  Employer;  provided,  however,  that  Employee may provide
advice and consultation to other entities with the written approval of Employer,
and further provided,  however, that nothing herein contained shall be deemed to
prevent or limit the right of Employee to invest any of his/her surplus funds in
the  capital  stock  or  other  securities  of any  corporation  whose  stock or
securities  are publicly owned or are regularly  traded on any public  exchange,
nor shall anything herein contained be deemed to prevent Employee from investing
or limit  Employee's  right to  invest  his/her  surplus  funds in real  estate.
Employee shall complete a Conflict of Interest form by February 15 of each



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     calendar  year and submit it to  Employer  for  review.  All  conflicts  of
interest or any potential conflicts of interest which arise during the year must
be immediately  reported to Employer.  All conflict of interest concerns must be
resolved  to  the  reasonable   satisfaction  of  Employer  as  a  condition  of
continuation of employment.

                                    ARTICLE V

                                BUSINESS SECRETS

     1.  Employee  shall not at any time or in any  manner,  either  directly or
indirectly, divulge, disclose or communicate to any person, firm or corporation,
in any manner whatsoever, any proprietary or confidential information concerning
any  matter   affecting   or  relating  to  the  business  of  Employer  or  its
subsidiaries, including without limiting the generality of the foregoing, any of
their customers, the prices they obtain from providers or have obtained from the
sale of,  or at  which  they  sell or have  sold,  its  services,  or any  other
information  concerning  the  business of Employer  or its  subsidiaries,  their
manner of operation,  or their plans, if such a disclosure  would be detrimental
to the business  interests  of Employer or its  subsidiaries.  2. If  Employee's
employment  hereunder is terminated by either party at any time hereafter,  then
Employee agrees to turn over to Employer all papers, documents,  working papers,
correspondence,  memos and any and all other documents in Employee's  possession
relating to or  concerning  any matter  affecting or relating to the business of
Employer or its subsidiaries.



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<PAGE>



                                   ARTICLE VI

                            NONCOMPETITION AGREEMENT

     1. Employee acknowledges that in Employee's employment hereunder,  Employee
will have  continual  contacts with the groups,  members,  and providers who are
covered by or  associated  with the  managed  health  care  programs  offered by
Employer or its  subsidiaries  in Nevada and other states.  In all of Employee's
activities, Employee, through the nature of Employee's work, will have access to
and will acquire confidential information related to the business and operations
of Employer and its subsidiaries,  including, without limiting the generality of
the foregoing,  member and group lists, and confidential information relating to
processes,  plans,  methods of doing  business  and  special  needs of  doctors,
hospitals,  members,  groups,  pharmacies,  or other health care  providers  who
contract with Employer or its subsidiaries.  Employee acknowledges that all such
information  is  the  property  of  Employer  or  its  subsidiaries  solely  and
constitutes  confidential  information  of such  parties;  that  the  disclosure
thereof  would  cause  substantial  loss to the  goodwill  of  Employer  and its
subsidiaries;  that disclosure thereof to Employee is being made only because of
the position of trust and  confidence  which Employee will occupy and because of
Employee's agreement to the restrictions herein contained; that his knowledge of
these matters would enable him, on  termination  of this  Agreement,  to compete
with Employer or its  subsidiaries  in a manner likely to cause Employer and its
subsidiaries  irreparable harm, and disclosure of such matters would,  likewise,
cause such



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     harm;  and that the  restrictions  imposed upon  Employee  herein would not
prohibit Employee in earning a living.

     2. It is understood and agreed by Employee and Employer that the essence of
this  Employment  Agreement is the mutual  covenants of the parties herein made,
that the present and future  members and groups of Employer or its  subsidiaries
will remain Employer's or its  subsidiaries'  members and groups during the term
of this Agreement and following its termination for any reason. In consideration
for the  employment and continued  employment of Employee by Employer,  and also
for the amount received by Employee as compensation, Employee hereby irrevocably
warrants, covenants, and agrees as follows:

     (a)  during  the  term of  Employee's  employment  and  after  leaving  the
employment  of  Employer  for any  reason,  whether  involuntary  or  voluntary,
Employee  will not take any action  whatsoever  which may or might  disturb  any
existing business relationship of Employer or its subsidiaries with any doctors,
groups, members, hospitals,  pharmacies or other health care providers in Nevada
who contract with Employer or its subsidiaries;

     (b) for a period of one (1) year after leaving the  employment of Employer,
Employee will not solicit business from the members or groups of Employer or its
subsidiaries  in Nevada,  or in any manner  disrupt  any  business  relationship
Employer or its  subsidiaries  has with any  contracted  health care provider in
Nevada with whom Employee came in contact as an employee of Employer.



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<PAGE>



     (c) for a period of one (1) year after leaving the  employment of Employer,
Employee will not, either directly or indirectly, work for any present or future
competitors of Employer operating in the state of Nevada who in any manner offer
any managed health care programs,  insurance coverage, or administer health care
claims for employers.  Such competitors  shall include,  but are not limited to,
HMOs, PPOs,  insurance companies,  utilization  management  companies,  or third
party administrators.

     3. The one (1) year period  specified in this Article will be tolled during
any period of breach of any of the terms of Article VI by Employee.

     4.  Employee  agrees  that in the  event  of a  breach  of any term of this
Agreement,  and more particularly,  in the event of a breach of any of the terms
and  provisions of Article VI,  Employer shall be entitled to secure an order in
any suit brought for that purpose to enjoin  Employee from  violating any of the
provisions of the  Agreement  and that,  pending the hearing and the decision on
the  application  for such  order,  Employer  shall be  entitled  to a temporary
restraining  order without  prejudice to any other remedy available to Employer,
all at the expense of Employee should Employer prevail in such action.  Employee
understands  that  the  covenants  of  this  Article  are  the  essence  of this
Employment  Agreement,  and without which no Employment  Agreement with Employee
would be entered into by Employer.

     5. The  provisions  of Article VI shall in no event be  construed  to be an
exclusive  remedy and such remedy shall be held and  construed to be  cumulative
and not



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<PAGE>



     exclusive  of any rights or remedies,  whether in law or equity,  otherwise
available  under the  terms of this  Agreement  or under the laws of the  United
States or the state of Nevada.

     6. The covenants and  agreements  made by Employee in this Article VI shall
be construed as an agreement independent of any other provision in the Agreement
and the existence of any claim or cause of action by Employee against  Employer,
whether  predicated  on this  Agreement  or  otherwise,  shall not  constitute a
defense to the enforcement by Employer,  by injunctive  relief or otherwise,  of
the  provisions of Article VI. The  invalidity of all or any part of any section
or paragraph of this Article VI shall not render  invalid the  remainder of this
Article or any section hereof.

     7. No failure or failures on the part of Employer to enforce any  violation
by Employee  of this  Noncompetition  agreement,  shall  constitute  a waiver of
Employer's rights thereafter to enforce all of the terms, covenants,  provisions
and agreements herein contained.

                                   ARTICLE VII

                            TERMINATION OF EMPLOYMENT

     1.  Termination  of employment by either  Employer or Employee shall follow
established Sierra Health Services Policies and Procedures including appropriate
notice, except as otherwise specifically set forth in this Article.

     2. Employee may terminate  employment  hereunder with sixty (60) days prior
written notice. If Employee shall voluntarily  terminate employment all eligible
separation



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<PAGE>



     compensation  and  benefits  as  are  routinely  made  available  to  other
employees of Employer at the same  organizational  level,  shall be paid or made
available to Employee.

     3. If Employer shall  terminate  Employee's  employment  hereunder  without
cause,  except as otherwise  set forth in  Paragraphs  6 and 7 of this  Article,
Employee  shall be entitled to nine (9) months  salary and all other  separation
compensation  and benefits as are routinely made available to other employees of
Employer at the same organizational level.

     4. In the event Employee's  employment  hereunder terminates for any reason
other than for cause, as set forth in Paragraph 6 of this Article,  Employee and
his/her family shall be eligible to remain covered under Employer's  health care
coverage program, at no expense, for a period of time equal to Employee's length
of  service  or until  Medicare  eligible,  whichever  occurs  first,  following
termination of such employment.

     5.  Notwithstanding  any other provision in this Agreement to the contrary,
Employee hereby agrees that any separation  compensation due to Employee,  other
than accrued  vacation,  shall be paid out 25% after the first 90 days,  37 1/2%
after  the first 180  days,  and the  remaining  37 1/2% at the end of 365 days,
except in the event of a change in control.  Payment of such amounts shall fully
release  Employer  from  any and all  liability  of  Employer  relating  to this
Agreement or the employment hereunder.  Any payments or such amounts which would
otherwise  be  payable  after a change in  control,  or arising as a result of a
change in control, shall be made in a lump sum within five (5)



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<PAGE>



business days  following the date of the change in control and shall,  except as
otherwise  provided in any other  benefit  program or in this  Agreement,  fully
release  Employer  from  any and all  liability  of  Employer  relating  to this
Agreement or the employment hereunder.

     6. If Employer  shall  terminate  Employee's  employment  due to Employee's
conduct  that is  materially  detrimental  to  Employer's  reputation,  business
relationships,  or for  misappropriation of Employer's funds,  Employee shall be
eligible for four (4) weeks  salary and any other  separation  compensation  and
benefits as are routinely made  available to other  employees of Employer at the
same  organizational  level,  as full and final  payment  under this  Agreement.
Payment of such amounts shall fully release  Employer from any and all liability
of Employer relating to this Agreement or the employment hereunder.

     7. (a) If Employee is unable to perform  Employee's  duties  hereunder,  by
reason of illness or incapacity  of any kind,  for a period of more than six (6)
months in excess of accrued sick leave,  Employee's  employment hereunder may be
terminated by Employer at its absolute discretion with one week of prior written
notice.

     (b) If  Employee's  illness or  incapacity  shall have ended,  and Employee
shall have assumed  Employee's duties hereunder,  prior to the date specified in
the notice of  termination,  Employee  shall be  entitled  to resume  Employee's
employment hereunder as if such notice had not been given.

     8. In the event of a change in control of  Employer,  whereby any  "person"
(as  such  term is used in  Sections  3(a)(9)  and  13(d)(3)  of the  Securities
Exchange Act of 1934)



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<PAGE>



     is or becomes the beneficial owner,  directly or indirectly,  of securities
of Employer  representing  51% or more of the combined  voting power of the then
outstanding  securities of Employer, and such change in control was not approved
by a majority of the Board of Directors of Employer,  Employee,  at his/her sole
option,  shall be entitled to terminate his/her  employment  hereunder and, upon
such  termination,  will be  entitled  to a cash  amount  equal to  (2.0)  times
Employee's  current  salary and the target  annual  bonus for which  Employee is
eligible  in the  year  of  termination,  together  with  any  other  separation
compensation  and benefits as are routinely made available to other employees of
Employer at the same organizational  level.  Employee's right to terminate under
this Paragraph 8 may be exercised at the time of the change in control or at any
time within two years after the change in control, including upon receipt of any
notice that  Employer has elected to  terminate  Employee's  employment  without
cause during such  two-year  period.  Payment of such amounts shall be made in a
lump sum within five (5) business days  following  the date such amounts  become
payable hereunder and shall,  except as otherwise  provided in any other benefit
program or in this Agreement,  fully release Employer from any and all liability
of Employer  relating to this Agreement or the employment  hereunder.  9. In the
event of a change in control of Employer,  whereby any "person" (as such term is
used in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934) is
or becomes the  beneficial  owner,  directly or  indirectly,  of  securities  of
Employer  representing  51% or more of the  combined  voting  power  of the then
outstanding securities



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<PAGE>



     of  Employer,  and such  change in control is approved by a majority of the
Board of  Directors  of Employer,  Employee,  at his/her  sole option,  shall be
entitled to terminate his/her  employment  hereunder and, upon such termination,
will be entitled to a cash amount equal to (2.0) times Employee's current salary
and the  target  annual  bonus for which  Employee  is  eligible  in the year of
termination, together with any other separation compensation and benefits as are
routinely   made   available  to  other   employees  of  Employer  at  the  same
organizational  level,  if, within two (2) years after the effective date of the
change  in  control  any one of the  following  occurs:  (a) the  assignment  to
Employee of any duties  inconsistent with Employee's position (including status,
offices,   titles,   and  reporting   requirements),   authority,   duties,   or
responsibilities  or any other action by the Employer that results in a material
diminution in such position,  authority, duties, or responsibilities,  excluding
for this  purpose  an action  not taken in bad  faith  and that is  remedied  by
Employer  within 10 days  after  receipt of written  notice by  Employee;  (b) a
reduction in Employee's  annual base salary or target bonus;  (c) the relocation
of Employer's  principle executive offices to a location more than 75 miles from
the current location of such offices or (d), in the event such change in control
occurs  within  the final two years  prior to the  calendar  date  stated as the
termination  date of the  Agreement  in Article II, and if, prior to such stated
termination date and prior to termination of Employee's employment, Employer has
not offered to enter into an  extension  of this  employment  agreement or a new
employment agreement providing benefits substantially equal to those under this



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<PAGE>



     agreement  for a term to extend  until at least two years after the date of
such change in control.  In  addition,  if  Employee's  employment  hereunder is
terminated  for reasons  other than those set forth in Paragraph 6 and 7 of this
Article  within two (2) years  after the  effective  date of a change in control
which was  approved by a majority of  Employer's  Board of  Directors,  Employee
shall be  entitled  to a cash amount  equal to (2.0)  times  Employee's  current
salary and the target annual bonus for which Employee is eligible in the year of
termination, together with all other separation compensation and benefits as are
routinely   made   available  to  other   employees  of  Employer  at  the  same
organizational level. Payment of such amounts shall be made in a lump sum within
five (5) business days following the date such amounts become payable hereunder,
and shall,  except as otherwise provided in any other benefit program or in this
Agreement,  fully  release  Employer  from  any and all  liability  of  Employer
relating to this Agreement or the employment hereunder.

     10. Anything contained herein to the contrary  notwithstanding in the event
that Employer shall discontinue  operation of Employer other than as a result of
a merger, consolidation or acquisition,  then this Agreement shall terminate and
the provisions of Article VI shall  terminate as of the last day of the month in
which Employer  ceases  operation with the same force and effect as if such last
day of the month were originally set as the termination date hereof.

11. Any amounts payable under this Article VII shall also be payable to Employee



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     in the event Employee is terminated  without cause during the 90-day period
prior to a Change in Control.

     12.  Whether  or  not  Employee  becomes  entitled  to any  payments  under
Paragraphs  1 through  11 of this  Article  VII,  if any  payments  or  benefits
received,  or to be received,  by Employee  (including the vesting of any option
and other non-cash benefits and property),  whether pursuant to any provision of
this Agreement or any other plan,  arrangement or agreement with Employer or any
affiliated  company,  excluding  the Gross- Up Payment  described  herein  (such
payments and benefits being the "Total Payments"), will be subject to any excise
tax imposed under section 4999 of the Internal  Revenue Code of 1986, as amended
(such excise tax,  including  penalties and interest thereon,  being the "Excise
Tax"),  Employer  shall pay to Employee  an  additional  amount  (the  "Gross-Up
Payment") such that the net amount retained by Employee, after reduction for any
Excise Tax on the Total  Payments and any federal and Excise Tax on the Gross-Up
Payment,  shall be  equal to the sum of (i) the  Total  Payments  plus  (ii) any
deductions  disallowed for federal income tax purposes  because of the inclusion
of the Gross-Up Payment in Executive's  adjusted gross income  multiplied by the
Executive's  highest  marginal rate of federal income  taxation for the calendar
year in which the Gross-Up Payment is to be made.




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<PAGE>



                                  ARTICLE VIII
                                EFFECT OF WAIVER

     The waiver by either party of a breach of any  provision of this  agreement
shall not operate or be construed as a waiver of any subsequent breach thereof.

                                   ARTICLE IX
                         ACTUAL ATTORNEY'S FEES EXPENDED

     Employer  and Employee  agree that all  attorneys  fees  expended by either
party in any dispute,  arbitration or litigation  concerning this Agreement will
be paid by the losing party in that dispute, arbitration or litigation.

                                    ARTICLE X

                                     NOTICE

     Any and all notices  referred to herein shall be sufficient if furnished in
writing, sent by registered mail to the representative  parties at the addresses
subscribed below their signatures to this Agreement.



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<PAGE>




                                   ARTICLE XI
                                   ASSIGNMENT

     The rights, benefits and obligations of Employee under this Agreement shall
be  assignable,  and all covenants and agreements  hereunder  shall inure to the
benefit of and be enforceable by or against Employer's successors or assigns.

                                   ARTICLE XII
                                ENTIRE AGREEMENT

     This Agreement  contains the entire Agreement between the parties,  and the
parties hereby agree that no other oral  representations or agreements have been
entered into in connection with this transaction.

                                  ARTICLE XIII
                                    AMENDMENT

     No amendment or modification  of this Agreement shall be deemed  effective,
unless or until, it is executed in writing by the parties hereto.





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<PAGE>




                                   ARTICLE XIV
                                    VALIDITY

     This Agreement,  having been executed and delivered in the State of Nevada,
its validity,  interpretation,  performance and enforcement  will be governed by
the laws of that state.

                                   ARTICLE XV
                                  SEVERABILITY

     It is mutually  agreed that all of the terms,  covenants,  provisions,  and
agreements  contained  herein are  severable  and that, in the event any of them
shall be held to be invalid by any  competent  court,  this  Agreement  shall be
interpreted as if such invalid term, covenant,  provision, or agreement were not
contained herein.

                                   ARTICLE XVI
                                      FORUM

     The  parties  hereto  consent  and agree that any  action to  enforce  this
Agreement  or any  provision  therein  or any  rights  hereunder  or any  action
relating to the  employment of Employee  with  Employer  shall be brought in the
State of Nevada.




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                                  ARTICLE XVII
                                 INDEMNIFICATION

     Employer shall  indemnify  Employee  whether or not then in office,  to the
fullest extent provided for in Employer's  Articles of  Incorporation or Bylaws,
as in effect, or as may thereafter be amended,  modified or revised from time to
time (collectively, "Employer's Articles"), or permitted under the law of Nevada
or such other state in which  Employer may hereafter be  domiciled,  against any
and all costs, claims, judgments, fines, settlements,  liabilities,  and fees or
expenses (including, without limitation, reasonable attorneys' fees) incurred in
connection  with  any  proceedings  (including  without  limitation,  threatened
actions,  suits or  investigations)  arising out of, or relating to,  Employee's
actions or in actions as a  director,  officer or  employee  of  Employer at any
point  during  his  employment  by or service to  Employer,  whether  under this
Agreement,  any prior employment  agreements or otherwise.  The  indemnification
contemplated  under this Section  shall be provided to Employee  unless,  at the
time indemnification is sought, such  indemnification  would be prohibited under
the law of  Nevada  or of the  state in which  Employer  may then be  domiciled;
Employer  may  rely  on  the  advice  of  its  counsel  in  determining  whether
indemnification is so prohibited.




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<PAGE>



      IN WITNESS WHEREOF, the parties have executed this Agreement at Las Vegas,
Nevada, on the day of , 19 .


SIERRA HEALTH SERVICES, INC.

By:______________________________
        Chief Executive Officer
        P. O. Box 15645
        Las Vegas, NV 89114-5645


EMPLOYEE

By:______________________________
        Paul H. Palmer
        1484 Flintrock
        Henderson, NV   89014




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<PAGE>


     ATTACHMENT A

COMPENSATION - Paul H. Palmer

1998           Subject to all the terms of this Agreement, the compensation for
----

     Employee shall be paid $________ per month ($____________ per annum).

















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