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                                                                   EXHIBIT 10.76


                                                             [ ] Employee's Copy
                                                             [ ] Company's Copy

                        PARACELSUS HEALTHCARE CORPORATION
                              EMPLOYMENT AGREEMENT

To JAMES G. VANDEVENDER

         This Agreement establishes the terms of your continued employment with
Paracelsus Healthcare Corporation, Inc., a California corporation (the
"Company") and reflects your new position as the Company's interim chief
executive officer ("CEO").

EMPLOYMENT AND DUTIES    You and the Company agree to your employment as interim
                         CEO. In such position, you will report directly to the
                         Company's Board of Directors (the "Board"). You agree
                         to perform whatever duties the Board may assign you
                         from time to time that are consistent with those of the
                         CEO of a public company. During your employment, you
                         agree to devote your full business time, attention, and
                         energies to performing those duties (except as the
                         Board otherwise agrees from time to time). On
                         termination of this Agreement, you agree that you
                         resign as an officer and director and from all other
                         officer and director positions at the Company and
                         subsidiaries.

                         You agree that, if the Company hires or promotes a new
                         CEO during the Term but retains your services in some
                         other capacity, your change in position by itself does
                         not constitute termination without Cause and does not
                         entitle you to any Severance, whether under this
                         Agreement or otherwise. However, the hiring or
                         promotion of a new CEO does not alter the Company's
                         obligations to you under this Agreement, including
                         those obligations described under the Salary, Benefits,
                         Bonus, Payments on Termination, and Severance sections.

TERM OF EMPLOYMENT       Your employment under this Agreement begins as of July
                         1, 1999 (the "Effective Date") and, unless sooner
                         terminated or extended, ends on December 31, 1999. The
                         period running from the Effective Date to the
                         applicable date in the preceding sentence is the
                         "Term."


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COMPENSATION

         Salary             The Company will pay you a salary (the "Salary")
                            from the Effective Date at the rate of not less than
                            $45,000 per month in accordance with its generally
                            applicable payroll practices.

         Benefits           During the Term, you will continue to be eligible to
                            participate in employee benefit and fringe benefit
                            plans and programs generally available to the
                            Company's executive officers and such additional
                            benefits as the Board may from time to time provide.
                            In addition, during the Term, you will continue to
                            be entitled to the following life insurance and
                            disability coverages and fringe benefits:

                        Life        The Company will maintain for your benefit
                        Insurance   life insurance coverage with a face amount
                                    equal to three times the amount of your
                                    annual Salary as in effect from time to
                                    time; provided, however, that if the Company
                                    cannot obtain the full amount of such life
                                    insurance coverage at a reasonable cost, the
                                    Company may instead provide you with a lump
                                    sum death benefit, payable within 90 days
                                    following your death, in such amount as
                                    will, when added to any life insurance
                                    coverage the Company actually obtains,
                                    provide your beneficiary or beneficiaries
                                    with a net amount, after payment of any
                                    Federal and state income taxes, equal to the
                                    net, after-tax amount such beneficiary or
                                    beneficiaries would have received had the
                                    Company obtained the full amount of life
                                    insurance coverage provided for above. You
                                    will have the right to name and to change
                                    from time to time the beneficiary or
                                    beneficiaries under such life insurance
                                    coverage (and death benefits, if any). Such
                                    life insurance coverage (and death benefits,
                                    if any) will be in addition to any death
                                    benefits that may be payable under any
                                    accidental death and dismemberment plan, any
                                    separate business travel accident coverage,
                                    or any pension plan in which you may
                                    participate, and such coverage will also be
                                    in addition to any life insurance that you
                                    purchase for yourself.

                        Long-Term   If you become disabled (as defined in the
                        Disability  long-term disability plan the Company
                                    presently maintains), you are to receive
                                    disability benefits in an amount equal to
                                    60% of your then annual Salary. Any amount
                                    payable under any


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                                    salary continuation plan (including any
                                    salary continuation provided under this
                                    Agreement) or disability plan maintained by
                                    the Company, and any amount payable to you
                                    or to your immediate family as a Social
                                    Security disability benefit or similar
                                    benefit will be counted towards the
                                    Company's fulfillment of such obligation.
                                    Disability benefits will be payable monthly
                                    beginning 30 days following disability and
                                    will continue until you are no longer
                                    disabled, or if earlier, until you reach age
                                    65.

                       Vacations    You will be entitled to such paid vacation
                       and          time as you may reasonably take in your
                       Holidays     discretion so long as such vacation time
                                    does not interfere with the efficient
                                    discharge of your duties and
                                    responsibilities. You will be entitled to
                                    all holidays as listed annually in the
                                    Company's official holiday schedule.

                       Tax Return   The Company will provide you with the
                       Preparation; assistance of its regular auditors for the
                       Financial    preparation of your Federal and state tax
                       Advice       returns without charge to you. In addition,
                                    the Company will reimburse you up to $5,000
                                    per year for the costs you incur for
                                    financial planning services .

                       Annual       The Company will reimburse you 100% of the
                       Physical     costs you incur in obtaining an annual
                                    comprehensive physical examination to be
                                    conducted by your choice of physician,
                                    clinic, or medical group located within a
                                    reasonable distance from your place of
                                    employment.

                                    Reimbursement for business expenses,
                                    including travel and entertainment, will be
                                    limited to reasonable and necessary expenses
                                    you incur on the Company's behalf in
                                    connection with performing duties on the
                                    Company's behalf and subject to (i) timely
                                    submission of a properly executed Company
                                    expense report form accompanied by
                                    appropriate supporting documentation, and
                                    (ii) compliance with Company policies and
                                    procedures governing business expense
                                    reimbursement and reporting based upon
                                    principles and guidelines established from
                                    time to time by the Board's Audit Committee,
                                    including periodic audits by the Company's
                                    Internal Audit Department and/or the Audit
                                    Committee.

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         Bonus               You will receive one but only one of the bonus
                             payments described below if the related event set
                             forth below (a "Bonus Determination") is completed
                             before December 31, 1999, with payment on the date
                             of completion:

                             o          Upon a sale of the Salt Lake facilities
                                        (Pioneer Valley Hospital, Salt Lake City
                                        Regional Medical Center, State Street
                                        Hospital, Davis Hospital Medical Center,
                                        Jordan Valley Hospital, and related
                                        operating Utah assets), a bonus of
                                        $125,000, plus 1% of the gross sales
                                        proceeds in excess of $306 million
                                        (excluding any payments for working
                                        capital included in the gross sales
                                        proceeds),

                             o          Upon a sale of XXXXXXXXXXX, a bonus of
                                        $125,000, plus 1% of the gross sales
                                        proceeds in excess of XXXXXXX (excluding
                                        any payments for working capital
                                        included in the gross sales proceeds), *

                             o          Upon a sale of all of the shares or
                                        assets of the Company, a bonus of
                                        $125,000, plus 1% of the total
                                        enterprise value (gross sales proceeds
                                        plus assumed funded indebtedness) in
                                        excess of $700 million,

                             o          Upon a recapitalization and sale of at
                                        least $25 million of additional common
                                        stock in a private transaction (i.e.,
                                        other than through a public offering), a
                                        bonus of $125,000, plus 1% of the total
                                        amount received in excess of $1.50 per
                                        common share sold (with appropriate
                                        adjustments for stock splits).

------------

TERMINATION              Subject to the provisions of this section, you and the
                         Company agree that it may terminate your employment, or
                         you may resign, except that, if you voluntarily resign,
                         you must provide the Company with 30 days' prior
                         written notice (unless the Board has previously waived
                         such notice in writing or authorized a shorter notice
                         period).

         For Cause       The Company may terminate your employment for "Cause"
                         if you:

*  Represents material that has been redacted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934. Omitted material for which Confidential treatment has been requested
has been filed separately with the Securities and Exchange Commission.

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                                   (i) commit an act of gross negligence or
                                   otherwise act with willful disregard for the
                                   Company's best interests;

                                   (ii) fail or refuse to perform any duties
                                   delegated to you that are consistent with the
                                   duties of similarly-situated executives or
                                   are otherwise required under this Agreement;

                                   (iii) seize a corporate opportunity for
                                   yourself instead of offering such opportunity
                                   to the Company; or

                                   (iv) are convicted of or plead guilty or no
                                   contest to a misdemeanor (other than a
                                   traffic violation) or felony, or, with
                                   respect to your employment, commit either a
                                   material dishonest act or common law fraud or
                                   intentionally violate any federal or state
                                   securities or tax laws.

                             Your termination for Cause will be effective
                             immediately upon the Company's mailing or
                             transmission of notice of such termination. Before
                             terminating your employment for Cause under clauses
                             (i) - (iii) above, the Company will specify in
                             writing to you the nature of the act, omission,
                             refusal, or failure that it deems to constitute
                             Cause and, if the Board considers the situation to
                             be correctable, give you 30 days after you receive
                             such notice to correct the situation (and thus
                             avoid termination for Cause), unless the Company
                             agrees to extend the time for correction. You agree
                             that the Board will have the reasonable discretion
                             to determine whether the situation is correctable
                             and whether your correction is sufficient.

         Without Cause       Subject to the provisions below under Payments on
                             Termination, the Company may terminate your
                             employment under this Agreement before the end of
                             the Term without Cause. The termination will take
                             effect 15 days after the Company gives you written
                             notice.

         Payments on         If you resign or the Company terminates your
         Termination         employment with or without Cause or because of
                             disability or death or this Agreement expires, the
                             Company will pay you any unpaid portion of your
                             Salary pro-rated through the date of actual
                             termination (and unless your termination is for
                             Cause, any bonus payments (i) already determined by
                             such date but not yet paid or (ii) whose Bonus
                             Determination occurs within 30 days of your actual
                             termination), reimburse any substantiated but
                             unreimbursed business expenses, pay any accrued and
                             unused vacation time (to


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                             the extent consistent with the Company's policies),
                             and provide such other benefits as applicable laws
                             or the terms of the benefits require. Except to the
                             extent the law requires otherwise or as provided in
                             the Severance paragraph, neither you nor your
                             beneficiary or estate will have any rights or
                             claims under this Agreement or otherwise to receive
                             severance or any other compensation, or to
                             participate in any other plan, arrangement, or
                             benefit, after such termination or resignation.

         Severance           In addition to the foregoing payments, if before
                             the end of the Term, the Company terminates your
                             employment without Cause, the Company will pay you
                             severance equal to the Salary due between the date
                             of termination and December 31, 1999, in a single
                             lump sum, on your actual date of termination. The
                             Company will also, to the extent permissible by the
                             terms of its benefit plans, insurance contracts,
                             and applicable law and except as provided in the
                             next sentence, cover you for a period of 36 months
                             under the medical, accident, disability, and life
                             insurance programs of the Company, or, if shorter,
                             until you are provided a substantially equivalent
                             benefit by a new employer. You acknowledge that
                             such continued coverage may not be possible or
                             practical and agree to accept in lieu of such
                             coverage (i) payment by the Company of the premiums
                             for the period indicated above on individual
                             insurance policies either you or the Company obtain
                             that provide substantially equivalent benefits or
                             (ii) if you are unable to obtain such coverage
                             (because you are uninsurable at commercially
                             reasonable rates or, as with disability, because
                             coverage may be unavailable if you are not
                             working), one or more payments totaling 150% of the
                             combined premium cost the Company paid on your
                             behalf in 1999 (annualized) for any of those
                             coverages under which you cannot participate after
                             employment ends.

                             You are not required to mitigate amounts payable
                             under the Severance paragraph by seeking other
                             employment or otherwise. Expiration of this
                             Agreement, whether because of notice of non-renewal
                             or otherwise, does not constitute termination
                             without Cause and does not entitle you to
                             Severance.

NONCOMPETITION               You specifically agree that the noncompetition and
AND SECRECY                  confidentiality obligations referenced in ""10 and
                             12 of the Memorandum of Understanding among the
                             Company, you, and certain others dated as of
                             November 25, 1998 ("MOU") bar you from competition
                             and


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                             disclosure or use of confidential information for
                             the periods stated or incorporated by reference and
                             according to the terms of those paragraphs. You
                             further specifically agree that, for 36 months
                             after your employment ends, you will not become
                             employed by or a consultant to the Dakota Clinic.
                             You agree that you were separately and adequately
                             compensated for the noncompetition obligations,
                             that they are ancillary to the MOU and other
                             agreements, and that they reasonably reflect the
                             need for the Company to protect its business
                             interests.

ASSIGNMENT                   The Company may assign or otherwise transfer this
                             Agreement and any and all of its rights, duties,
                             obligations, or interests under it to any of the
                             affiliates or subsidiaries of the Company. Upon
                             such assignment or transfer, any such business
                             entity will be deemed to be substituted for the
                             Company for all purposes. You agree that assignment
                             or transfer does not entitle you to Severance. This
                             Agreement binds and benefits the Company and its
                             assigns and your heirs and the personal
                             representatives of your estate. Without the Board's
                             prior written consent, you may not assign or
                             delegate this Agreement or any or all rights,
                             duties, obligations, or interests under it.

SEVERABILITY                 If the final determination of an arbitrator or a
                             court of competent jurisdiction declares, after the
                             expiration of the time within which judicial review
                             (if permitted) of such determination may be
                             perfected, that any term or provision of this
                             Agreement is invalid or unenforceable, the
                             remaining terms and provisions will be unimpaired,
                             and the invalid or unenforceable term or provision
                             will be deemed replaced by a term or provision that
                             is valid and enforceable and that comes closest to
                             expressing the intention of the invalid or
                             unenforceable term or provision.

AMENDMENT; WAIVER            Neither you nor the Company may modify, amend, or
                             waive the terms of this Agreement other than by a
                             written instrument signed by you and a director of
                             the Company duly authorized by the Board. Either
                             party's waiver of the other party's compliance with
                             any provision of this Agreement is not a waiver of
                             any other provision of this Agreement or of any
                             subsequent breach by such party of a provision of
                             this Agreement.


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WITHHOLDING                  The Company will reduce its compensatory payments
                             to you for withholding and FICA taxes and any other
                             withholdings and contributions required by law.

GOVERNING LAW                The laws of the State of Texas (other than its
                             conflict of laws provisions) govern this Agreement.

NOTICES                      Notices must be given in writing by personal
                             delivery, by certified mail, return receipt
                             requested, by telecopy, or by overnight delivery.
                             You must send or deliver your notices to the
                             Company's corporate headquarters. The Company will
                             send or deliver any notice given to you at your
                             address as reflected on the Company's personnel
                             records. You and the Company may change the address
                             for notice by like notice to the others. You and
                             the Company agree that notice is received on the
                             date it is personally delivered, the date it is
                             received by certified mail, the date of guaranteed
                             delivery by the overnight service, or the date the
                             fax machine confirms effective transmission.

SUPERSEDING EFFECT           Except as set forth below, this Agreement
                             supersedes any prior oral or written employment,
                             severance, or fringe benefit agreements between you
                             and the Company, other than with respect to your
                             eligibility for generally applicable employee
                             benefit plans and supersedes any other prior or
                             contemporaneous negotiations, commitments,
                             agreements, and writings, with respect to this
                             Agreement, relating to the subject matter of this
                             Agreement, except as specified in this Agreement.
                             All such other negotiations, commitments,
                             agreements, and writings, with respect to this
                             Agreement, will have no further force or effect;
                             and the parties to any such other negotiation,
                             commitment, agreement, or writing will have no
                             further rights or obligations thereunder.

                             Notwithstanding the previous paragraph, this
                             Agreement does not supersede or render invalid the
                             following agreements into which you previously
                             entered: (1) the MOU, as amended by the Derivative
                             Settlement Agreement dated March 17, 1999, should
                             that agreement become effective, except to the
                             extent a matter specifically addressed in this
                             Agreement conflicts with the MOU, in which event,
                             this Agreement will control; (2) the Derivative
                             Settlement Agreement dated March 17, 1999, except
                             with respect to those conflicts referenced in
                             subparagraph (1) of this paragraph; (3) the Class
                             Action Memorandum of Understanding dated


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                             March 24, 1999; (4) the Stipulation of Settlement
                             dated May 11, 1999; (5) the Settlement Agreement
                             referencing the Great American Insurance Company
                             Policy bearing policy number DFX0009397; and (6)
                             the VanDevender to Paracelsus Release of SERP
                             Benefits dated as of December 3, 1998. This
                             Agreement must not be construed to deprive you of
                             any of your rights created or preserved in any
                             agreement or order entered into after the Effective
                             Date and relating to the settlement of the In re:
                             Paracelsus Securities Corp., the Caven, or the
                             Orovitz litigation, unless such agreement or order
                             specifically provides that this Agreement will
                             control. This Agreement must not be construed to
                             abrogate or render invalid any obligation or right
                             of indemnification or advancement of costs or
                             expenses that may be owed to you under any
                             contract, the Company's Articles of Incorporation
                             or Bylaws, California law, or Texas law or to alter
                             any right created or preserved as part of the
                             pending settlement of the In re: Paracelsus
                             Securities Corp., the Caven, or the Orovitz
                             litigation, unless such right is specifically
                             altered by this Agreement. This Agreement does not
                             impair the effectiveness of the release between the
                             parties to this Agreement delivered to you on April
                             14, 1999, by Bank One as escrow agent.


If you accept the terms of this Agreement, please sign in the space indicated
below. We encourage you to consult with any advisors you choose.


                                    PARACELSUS HEALTHCARE CORPORATION

                                    By:
                                        ----------------------------------------

                                                Name:
                                                      --------------------------

                                                Title:
                                                       -------------------------


I accept and agree to the terms of employment set
forth in this Agreement:


---------------------------------
       James G. VanDevender

Dated:
       --------------------------


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