OLYMPUS PARTNERS Metro Center, One Station Place Stanford, Connecticut 06902 (203)353-5900 James A. Conroy Partner June 27, 1997 Via Facsimile: 281-774-5110 - --------------------------- The Board of Directors Paracelsus Healthcare Corporation 515 West Greens Road Houston, Texas 77067 Attention: Mr. Charles R. Miller Gentlemen: I hereby resign as a director of Paracelsus effective immediately. My resignation is due to my unhappiness with the unwillingness of the Special Committee to address the issue of the old Paracelsus board members' responsibility for the reporting and accounting failures found by the Special Committee, as well as my strong disagreement with the decision made by the other board members not to make full disclosure of the results of the Special Committee's investigation to the Securities and Exchange Commission. I request that this letter be filed in a Form 8-K within the required time period. Sincerely, /s/ James A. Conroy JAC/jbp cc: Arthur F. Mathews, Esq.