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.