Exhibit 10.113

                           EMPLOYMENT AGREEMENT



       THIS EMPLOYMENT AGREEMENT is made and entered into as of the  18th
  day of May, 1999,  by and between James  C. Smith (the "Employee")  and
  First Health Group Corp., a Delaware corporation (the "Company").

       IN CONSIDERATION of the mutual promises set forth below, and other
  good and valuable consideration, the  receipt and sufficiency of  which
  are hereby acknowledged, the parties hereby agree as follows:

       1.   Employment.  The Company hereby employs the Employee, and the
  Employee hereby accepts employment with the Company, upon the terms and
  subject to the conditions hereinafter set forth.

       2.   Duties.

            a.   Employment.  The Employee  is employed as the  President
  and Chief  Executive  Officer  of the  Company  and  shall  render  his
  services at the principal  business offices of  the Company in  Downers
  Grove, Illinois,  unless  otherwise agreed  by  him and  the  Board  of
  Directors of the Company.  The  Employee shall have such authority  and
  shall perform such duties as are  customary for the office to which  he
  has been appointed, including,  without limitation, the full  authority
  to conduct and direct the day-to-day operations of the Company, subject
  to such limitations, instructions, directions and control as the  Board
  of Directors of the Company or the Chairman of the Board of the Company
  (acting at  the  direction  or  with the  authority  of  the  Board  of
  Directors) may  specify from  time to  time.   He shall  not  otherwise
  devote time to the active pursuit of any other business enterprise, nor
  shall he  have  any  interest  in  any  business  enterprise  which  is
  competitive with or  adverse to the  Company, whether  as an  employee,
  officer, director, consultant, creditor,  security holder or  otherwise
  (except to the extent permitted in Paragraph 8 hereof).  The  foregoing
  notwithstanding, the  Employee  shall  be entitled  to  belong  to  and
  participate in professional organizations and to engage in professional
  activities in furtherance of the Company's business.

            b.   Stock Retention.    Employee  will  own  not  less  than
  164,000 shares of the Company's common stock until June 30, 2003.

       3.   Term.  The term of Employee's employment under this Agreement
  shall commence on May 18, 1999 and shall terminate on December 31, 2001
  unless otherwise terminated in accordance with the terms hereof.

       4.   Compensation.   As  compensation for  the  services  rendered
  hereunder, the Employee shall be entitled to receive the following:

            a.   Base Salary.   Effective  the  date of  this  Agreement,
  Employee shall receive  an annual salary  of $920,700 ("Base  Salary").
  Effective January 1, 2000 Base Salary  will be $950,000, and  effective
  January 1, 2001  Base Salary  will be $975,000.   Base  Salary will  be
  payable in installments at  such times and in  such manner as may  from
  time to time be in effect for  executives of the Company, but not  less
  often than monthly.
<PAGE>
             b.   Additional Compensation.  As  soon as practicable after
  the end of  each fiscal year  of the Company  during the  term of  this
  Agreement and commencing with  the year ending  December 31, 2000,  the
  Company's  Pretax  Income  for  such  fiscal  year  (as  determined  in
  accordance with  generally  accepted  accounting  principles)  will  be
  compared to the Company's Pretax  Income for the immediately  preceding
  fiscal year (Threshold Year).  If Pretax Income has increased by 5%  or
  more for the year,  the resulting percentage  increase (rounded to  the
  nearest  whole  number)  will  be  used  to  determine  any  Additional
  Compensation payable  to  Employee  in accordance  with  the  following
  table:

                                       Additional
                                   Compensation Factor
                Pretax Income      (as % of Threshold
                  Increase          Year Base Salary)
                  --------          ----------------
                      5%                   25%
                     10%                   50%
                     20%                   75%
                     30%                  100%
                     40%                  125%
                     50%*                 150%

  *For  each  additional  10%  Pretax  Income  Increase  above  50%,  the
  Additional Compensation Factor will increase by 25%.

  Additional Compensation will be  earned pro rata  to the Pretax  Income
  Increase.  In  example, if the  Pretax Income  increases 15%,  Employee
  will receive  62.5%  (50%  plus  12.5%  (the  pro  rata  increase))  of
  Threshold Year Base Salary in Additional Compensation.

  If a  merger, acquisition,  accounting pronouncement  or other  unusual
  financial event of the Company causes  a material change to the  Pretax
  Income for any year, Employee and Company agree that for the purpose of
  this Agreement only, Pretax Income will  not include the unusual  event
  and/or will  be modified  to neutralize  the  financial effect  of  the
  event.

       5.   Stock  Options.     Subject  to  receipt   of  any   required
  stockholder approval and effective upon  the execution and delivery  of
  this Agreement,  the Company  shall grant  to the  Employee options  to
  purchase shares of Common Stock of the Company, each such option to  be
  on the terms  and subject  to the  conditions of  the respective  stock
  option agreements (the "Option Agreements") to be entered into  between
  the Company and the Employee, the forms of which are attached hereto as
  Exhibits 1, 2 and 3.
<PAGE>
       6.   Benefits.

            a.   Benefits During the Term of this Agreement.  In addition
  to the compensation to be paid to the Employee pursuant to Paragraph  4
  hereof, the Employee shall be entitled  to participate in all  employee
  benefit programs currently maintained by  the Company as such  programs
  may be modified from time to time and each such other program or policy
  established by the Company  from time to time  during the term of  this
  Agreement for its  employees and  executives generally  (to the  extent
  that it is  more favorable  to the  Employee than  an existing  program
  covering the same benefit).   Employee shall be  entitled to an  annual
  paid vacation of four weeks during  each year of employment  hereunder.
  Unused vacation time  shall accumulate  from year  to year,  but in  no
  event shall  the Employee  be entitled  to accumulate  more than  eight
  weeks of vacation time.

            b.   Benefits After the Term of this Agreement.  The  Company
  hereby confirms  the  existence of  the  grant of  health  benefits  to
  Employee after the term  of this Agreement as  first set forth in  that
  certain Employment Agreement, dated as of July 1, 1993 between Employee
  and the Company (the "1993 Employment Agreement").

       7.   Reimbursement  of  Expenses.    The  Company,  promptly  upon
  receipt from the Employee of appropriate documentation, shall reimburse
  the Employee for  all of his  reasonable business expenses,  including,
  without limitation,  travel  expenses,  necessarily  and  appropriately
  incurred in the performance of his duties hereunder.

       8.   Confidentiality and Competition.

            a.   In consideration  of  the  substantial  benefits  to  be
  provided hereunder to the Employee by  the Company, and in  recognition
  of the  fact  that  the  Employee occupies  a  position  of  trust  and
  confidence with  the Company,  the Employee  acknowledges that  he  has
  provided, created and acquired and  hereafter will provide, create  and
  acquire valuable and confidential information  of a special and  unique
  nature relating  to  such  matters  as  the  Company's  trade  secrets,
  systems, procedures, manuals,  confidential reports, employee  rosters,
  client  lists,  software  systems,  products,  business  and  financial
  methods and  practices,  plans, pricing,  selling  techniques,  special
  methods and processes involved  in designing, assembling and  operating
  computer programs previously and currently used by the Company and  the
  application  thereof  to  managed  care  programs  and  other   related
  electronic  data  processing   information  respecting  the   Company's
  existing businesses and services and those developed during the term of
  this Agreement, as well  as credit and financial  data relative to  the
  Company and its  clients, and the  particular business requirements  of
  the Company's clients, including the methods used and preferred by  the
  Company's clients and  fees paid  by such  clients.   In addition,  the
  Employee has developed and may further develop on behalf of the Company
  a personal acquaintance with the Company's clients, which acquaintances
  may constitute  the Company's  only contact  with  such clients.    For
  purposes of  this Paragraph  8, the  term  "Company" shall  mean  First
  Health Group Corp. and each company  which is a subsidiary thereof  and
  any partnership  or joint  venture in  which the  Company or  any  such
  subsidiary owns an equity interest at any time during the term of  this
<PAGE>
  Agreement.   In view  of  the foregoing  and  in consideration  of  the
  remuneration to  be  paid  to  the  Employee  hereunder,  the  Employee
  acknowledges and agrees  that it is  reasonable and  necessary for  the
  protection of the goodwill and business of the Company that he make the
  covenants contained herein regarding his conduct during and  subsequent
  to his  employment by  the Company  and that  the Company  will  suffer
  irreparable injury  if  the Employee  were  to engage  in  any  conduct
  prohibited hereby.  The Employee represents that his experience  and/or
  abilities are such that the observance of the aforementioned  covenants
  will  not  cause  the  Employee  any   undue  hardship,  nor  will   it
  unreasonably  interfere  with   the  Employee's  ability   to  earn   a
  livelihood.   The  Employee and  the  Company further  agree  that  the
  covenants contained in this  Paragraph 8 shall each  be construed as  a
  separate  agreement  independent  of  any  other  provisions  of   this
  Agreement, and that the  existence of any claim  or cause of action  by
  the Employee against the Company, whether predicated on this  Agreement
  or otherwise, shall not constitute a defense to the enforcement by  the
  Company  of  any  of  these  covenants;  provided,  however,  that  the
  covenants contained in this Paragraph 8 shall not be enforceable by the
  Company during any period in which the Company has wrongfully failed to
  make a required  payment under  Paragraph 4a hereof.   In  the event  a
  court of competent jurisdiction determines  that any provision of  this
  Paragraph 8  is  unreasonable as  to  duration, substantive  extent  or
  geographic scope, the  provision will  nonetheless be  enforced to  the
  fullest extent reasonable.

            b.   The Employee, while in the employ  of the Company or  at
  any time thereafter,  will not  directly or  indirectly communicate  or
  divulge, or use  for the  benefit of himself  or of  any other  person,
  firm, association or corporation, any of the Company's trade secrets or
  other confidential  information,  including,  without  limitation,  the
  information  described  in  Paragraph  8a,  which  trade  secrets   and
  confidential information were or will  be communicated to or  otherwise
  learned or acquired  by the Employee  in the course  of his  employment
  with the Company, except that the Employee may disclose such matters to
  the extent that the disclosure thereof is required:  (i) in the  course
  of his employment with  the Company, provided  such disclosure is  made
  exclusively for  the  benefit of  the  Company,  or (ii)  by  a  court,
  governmental agency of competent jurisdiction or grand jury.

            c.   During the term of his  employment with the Company  and
  for a period of three years thereafter, the Employee will not  contact,
  directly or  indirectly, with  a view  towards selling  any product  or
  service competitive with any product or service sold (or proposed to be
  sold) by the Company during the Employee's employment, any person, firm
  association or corporation (i)  to which the  Company has provided  its
  services, or (ii) which  the Employee or, to  his knowledge, any  other
  employee or representative of the  Company has solicited, contacted  or
  otherwise dealt with on behalf of the Company, nor will he directly  or
  indirectly make any such contact, for  the benefit or on behalf of  any
  other person, firm, association or corporation or in any manner  assist
  any person, firm, association or corporation to make any such contact.
<PAGE>
            d.   During the term of his employment by the Company and for
  a period of three years thereafter,  the Employee will not directly  or
  indirectly acquire any  interest in any  corporation, firm or  business
  (other than the Company) which is engaged in any business in the United
  States the same as, similar to or competitive with the business of  the
  Company as  conducted at  any time  during the  Employee's  employment,
  whether as an employee, sole proprietor, director, officer, consultant,
  equity security holder or otherwise (except that he may own up to 2% of
  the outstanding shares of capital stock of any corporation whose  stock
  is listed on a national securities  exchange or is traded in the  over-
  the-counter market), nor will the Employee directly or indirectly  have
  any interest in any corporation, firm or business which is engaged in a
  business adverse to the Company's business  (except that he may own  up
  to 2% of  the outstanding shares  of capital stock  of any  corporation
  whose stock is listed on a national securities exchange or is traded in
  the over-the-counter market).

            e.   During the term of his employment by the Company and for
  a period of three years thereafter, neither the Employee nor any entity
  by which the  Employee is employed  or otherwise  associated with  will
  directly or  indirectly employ,  retain the  services of  or induce  or
  attempt to  induce, in  any manner  whatsoever, any  present or  future
  employee of the Company  to leave the employ  of the Company and/or  to
  seek or accept employment with the Employee or any other person,  firm,
  association or corporation.

            f.   In the  event  of a  breach  or threatened  or  intended
  breach of this Agreement and the  foregoing covenants by the  Employee,
  the Employee  acknowledges that  the  Company will  suffer  irreparable
  injury and  that determination  of the  exact amount  of the  Company's
  damages will  be difficult,  if not  impossible,  and agrees  that  the
  Company shall be entitled, in addition to remedies otherwise  available
  to it  at  law or  in  equity,  to injunctions,  both  preliminary  and
  permanent and  without bond  therefor,  enjoining or  restraining  such
  breach or  threatened  or  intended breach,  and  the  Employee  hereby
  consents to the issuance  thereof forthwith by  any court of  competent
  jurisdiction.

       9.   Termination of Employment.

            a.   Incapacity.  If, during the term of this Agreement,  the
  Employee should be prevented  from performing his  duties by reason  of
  illness or  physical  or  mental disability  (hereinafter  referred  to
  collectively as "Incapacity") for a continuous period of between 90 and
  180 days, the Employee shall receive one-half his per diem Base  Salary
  for each  day  during  such time  period  that  he fails,  due  to  his
  Incapacity, to render the services  contemplated hereunder.  If  during
  the term  of this  Agreement, the  Employee  should be  prevented  from
  performing his duties by reason of  Incapacity for a continuous  period
  greater than  180  days,  the  Company  may  terminate  the  Employee's
  employment hereunder by giving written notice thereof to the  Employee,
  effective on the date set forth in the notice (which date shall be  not
  less than 15 business days after the notice is given).

            For purposes hereof, a continuous period of Incapacity  shall
  not be deemed interrupted until  the Employee returns to  substantially
  full time work for a period of at least 30 days.
<PAGE>
            b.   Death.  In the event of the Employee's death during  the
  term of this  Agreement, the Employee's  employment hereunder shall  be
  deemed terminated as of the date of the Employee's death.

            c.   Cause.   This Agreement  and the  Employee's  employment
  hereunder may be terminated at any time  by the Company for cause.   As
  used herein "cause" shall mean (i) theft, embezzlement or fraud by  the
  Employee  or  the  Employee's  involvement  in  any  other  scheme   or
  conspiracy pursuant to which the Company  has lost or could  reasonably
  be expected to lose assets to  the Employee or to others calculated  by
  the Employee to  receive such  assets, (ii)  incapacity on  the job  by
  reason  of  the use  or  abuse of  alcohol or  drugs,  (iii) commission
  of  a  felony  or  a  crime  involving  moral  turpitude,   (iv)  gross
  insubordination, (v)  unexplained and  continuous absences  from  work,
  (vi) material breach of the Employee  of any of the provisions of  this
  Agreement which is not cured within 30 business days after the  Company
  gives written notice thereof to the  Employee specifying the nature  of
  such breach, (vii) refusal to act in accordance with a lawful and  duly
  adopted resolution of the Board of Directors.

            d.   Termination of Employment by the  Employee.  If, at  any
  time during  the term  of this  Agreement, the  Employee shall  not  be
  reappointed as President and Chief Executive Officer of the Company but
  his services under this  Agreement are not  terminated by the  Company,
  the Employee shall have the right, by written notice to the Chairman of
  the  Board  of  the  Company,  to  terminate  his  services  hereunder,
  effective as of the thirtieth day after receipt of said notice, and the
  Employee shall have no further obligations under this Agreement, except
  as provided  in Paragraph  8 hereof.    Termination of  the  Employee's
  services pursuant to this Paragraph shall  be treated as a  termination
  of employment by the Company other than for cause and shall be governed
  by the provisions of Paragraph 10e hereof.

            e.   Termination of Employment by  the Company.  The  Company
  may  terminate  the  Employee's   employment  for  any  reason   deemed
  sufficient by the Company.

            As used in this Paragraph 9, unless otherwise specified,  the
  term "days" refers to calendar days.

       10.  Effect of Termination of Employment.

            a.   Incapacity.   If termination  of employment  results  or
  occurs due to Incapacity under Paragraph  9a, the Company shall pay  or
  cause to  be paid  in a  lump sum  (i)  such amounts,  if any,  as  the
  Employee shall be entitled to under the Company's disability policy and
  program applicable to the Employee, (ii) subject to the limitations set
  forth in the last sentence of  Paragraph 6a hereof, payment in  respect
  of all unused paid  vacation time, to the  extent the Employee has  not
  prior  thereto  received  compensation  in  lieu  thereof,  (iii)   the
  Employee's interest in all Company retirement and investment plans,  to
  the extent such plans permit such  interest to be distributed and  (iv)
  payment  in  respect  of  all  compensation  earned  to  date  but  not
  theretofore paid.
<PAGE>
            b.   Death.  If termination of employment occurs as a  result
  of the Employee's death, the Company shall pay to the Employee's estate
  a lump sum payment equal to  (i) such amounts as the Employee's  estate
  shall be  entitled  to  receive  under  the  terms  of  retirement  and
  investment plans of the Company, to  the extent such plans permit  such
  amounts to be  paid, (ii) subject  to the limitation  set forth in  the
  last sentence of Paragraph 6a hereof, payment in respect of all  unused
  paid vacation time, to  the extent the Employee  has not prior  thereto
  received compensation in lieu thereof, and (iii) payment in respect  of
  all compensation earned to date but not theretofore paid.  In addition,
  the Company will pay to his  spouse for a period  of 60 days an  amount
  equal to the Employee's per diem Base Salary.

            c.   Cause.  If  the Employee's employment  is terminated  by
  the Company for  cause, Employee shall  be entitled to  all earned  but
  unpaid compensation, provided, however,  the Company shall be  entitled
  to offset therefrom  any amounts  lost by the  Company as  a result  of
  Employee's action giving rise to such cause.

            d.   Voluntary  Termination.      If   the   Employee   shall
  voluntarily terminate his  employment hereunder, the  Company shall  be
  obligated to pay  or cause  to be paid  in a  lump sum  (i) payment  in
  respect of  the  Employee's  interest in  all  Company  retirement  and
  investment plans, to the  extent such plans permit  such payment to  be
  made, (ii) subject to the limitations set forth in the last sentence of
  Paragraph 6a hereof,  payment in respect  of all  unused paid  vacation
  time, to  the  extent  the Employee  has  not  prior  thereto  received
  compensation in lieu thereof.

            e.   Termination of Employment Pursuant  to Paragraphs 9d  or
  9e.  In  the event that  this Agreement is  terminated by the  Employee
  pursuant to Paragraph 9d hereof or by the Company pursuant to Paragraph
  9e hereof, the Company shall be obligated to pay or cause to be paid to
  the Employee (i) the balance of the Base Salary payments required to be
  paid during the remaining term of this Agreement, which payments  shall
  be made at regular intervals in  accordance with the Company's  regular
  pay periods, (ii) payment in respect of the Employee's interest in  all
  Company retirement and investment plans, to the extent that such  plans
  permit such payment to  be made, and (iii)  subject to the  limitations
  set forth  in the  last sentence  of Paragraph  6a hereof,  payment  in
  respect of all unused paid vacation  times, to the extent Employee  has
  not prior  thereto received  compensation in  lieu thereof.    Payments
  pursuant to subsections (ii) and (iii) shall be paid in a lump sum.

            f.   Effect of Termination of  Employment: Survival.  In  the
  event that the Employee's employment with the Company terminates,  this
  Agreement shall be deemed terminated, provided, however, that the terms
  and conditions of Paragraphs 2b, 6b  (to the extent provided  therein),
  8, 9 and  10 shall survive  such termination and  be fully binding  and
  enforceable.
<PAGE>
       11.  Return of Documents.  Upon termination of this Agreement  for
  any reason, the Employee shall deliver to the Company any property then
  in his  possession belonging  to the  Company.   For purposes  of  this
  Agreement, the  parties hereto  do hereby  agree that  any original  or
  copies of any books, papers, customer lists, files, books of  accounts,
  summaries, notes and other documents and data or other writings,  tapes
  or records, relating to the company or prepared in connection with  the
  Employee's performance of his  duties hereunder, are  owned by and  are
  the property of the Company.

       12.  Best Efforts.  The Company and the Employee each agree to use
  its or his best  efforts to operate  the business of  the Company in  a
  manner designed to maximize the revenues and net income of the  Company
  and to preserve and enhance its goodwill and other assets.

       13.  Termination  of  Prior  Employment  Agreement.    All   prior
  employment  agreements  between   Company  and   Employee  are   hereby
  terminated.

       14.  Notices.  Any notices to be  given hereunder by either  party

  to the other may be effected either by personal delivery in writing  or
  by mail, registered or certified, postage prepaid, with return  receipt
  requested.   Mailed  notices  shall  be  addressed  to  the  respective
  addresses shown below.  Either party may change its address for  notice
  by giving written notice in accordance with the terms of this Paragraph
  14.

            a.   If to the Employee:

                 James C. Smith
                 First Health Group Corp.
                 3200 Highland Avenue
                 Downers Grove, Illinois 60515

            b.   If to the Company:

                 Susan T. Smith
                 General Counsel
                 First Health Group Corp.
                 3200 Highland Avenue
                 Downers Grove, Illinois 60515

                 with a copy to:
                 Chairman of the Compensation Committee
                 of the First Health Group Corp. Board of Directors

       15.  Acknowledgment  of  Reading.    The  Employee   acknowledges,
  represents and warrants to the Company  that he has received a copy  of
  this Agreement, that he has read  and understands this Agreement,  that
  he has had the opportunity to  seek the advice of legal counsel  before
  signing this Agreement and  that he has either  sought such counsel  or
  has voluntarily decided not to do so.
<PAGE>
       16.  General Provisions.

            a.   Governing Law.   This  Agreement shall  be governed  and
  construed in accordance with the law of the State of Illinois.

            b.   Invalid Provisions.  If any provision of this  Agreement
  is held  to be  illegal, invalid,  or  unenforceable under  present  or
  future laws effective during the term hereof, such provisions shall  be
  fully severable and this Agreement shall  be construed and enforced  as
  if  such  illegal,  invalid  or  unenforceable  provisions  had   never
  comprised a  part hereof;  and the  remaining provisions  hereof  shall
  remain in  full force  and effect  and  shall not  be affected  by  the
  illegal, invalid  or  unenforceable  provisions  or  by  its  severance
  herefrom.    Furthermore,   in  lieu  of   such  illegal,  invalid   or
  unenforceable provision as similar in terms to the illegal, invalid  or
  unenforceable provision as may be possible and still be legal, valid or
  enforceable.

            c.   Entire  Agreement.    This  Agreement  and  the   Option
  Agreements set  forth  the entire  understanding  of the  parties  with
  respect to the matters specified herein.  No other terms, conditions or
  warranties, and no amendments or modifications hereto, shall be binding
  unless made in writing and signed by the parties hereto.

            d.   Binding Effect:  Assignment and Assumption of Agreement.
  This Agreement shall be  binding upon the parties  hereto and inure  to
  the benefit of such  parties, their respective heirs,  representatives,
  successors and permitted assigns.  This  Agreement may not be  assigned
  by the  Employee nor  may it  be assigned  by the  Company without  the
  Employee's consent.

            e.   Waiver.  The waiver by either party hereto of any breach

  of any  term or  condition of  this Agreement  shall not  be deemed  to
  constitute the waiver of any other breach of the same or any other term
  or condition hereof.

            f.   Titles.  Title  of the  paragraphs herein  are used  for

  convenience  only  and  shall  not   be  used  for  interpretation   or
  construction of  any  word, clause,  paragraph,  or provision  of  this
  Agreement.

            g.   Counterparts.  This Agreement may be executed in one  or

  more counterparts, each of which shall be deemed an original but  which
  together shall constitute one and the same Agreement.
<PAGE>

       IN WITNESS WHEREOF,  the Company  and the  Employee have  executed
  this Agreement as of the date and year first written above.

                                     COMPANY:

                                     FIRST HEALTH GROUP CORP.


                                     By:
                                          ------------------
                                          Thomas J. Pritzker
                                          Chairman of the Board



                                     EMPLOYEE:

                                           --------------
                                          JAMES C. SMITH