EXHIBIT 10(aa)

                              FIRST AMENDMENT TO
                          DEFERRED COMPENSATION PLAN

       I, Scott M. Brown, the Secretary of National Medical Enterprises, Inc.
("NME"), hereby certify that on December 1, 1993 and April 13, 1994, the
Compensation and Stock Option Committee of the Board of Directors of NME
approved the following amendments to the Deferred Compensation Plan (the
"Plan"):

    1. The second paragraph of Section 5 of the Plan is hereby amended by
       deleting such paragraph in its entirety and replacing it with the
       following:

       "In the event of the death of the Participant, compensation that has
       been deferred together with the accumulated interest will be
       distributed to the beneficiary named by the Participant or to the
       estate of the Participant in 120 approximately equal monthly payments
       unless the Committee, in its sole discretion, determines upon written
       request of the beneficiary that payment shall be made voer a shorter
       period or in a lump sum.  Payment shall commence within 30 days after
       the death of the Participant, with interest continuing to accrue
       pursuant to Section 3(b) hereof until the full amount of deferred
       compensation is paid."

    2. The following language shall be added as new Paragraph 8 to the Plan:

       "8. LUMP SUM DISTRIBUTIONS.  At any time either (a) prior to an event
       causing distribution in accordance with Paragraph 4 hereto or (b)
       after a Participant or his or her beneficiary is receiving
       distributions in installments in accordance with Paragraph 5 hereof
       and has not received the entire balance of a Participant's deferred
       compensation account, a Participant in the Plan or his or her
       beneficiary may elect to receive a lump sum payment, in an amount
       determined below, sixty (60) days after giving notice to the Committee
       of the Participant's or beneficiary's desire to receive such lump sum
       benefit.  The date of the notice shall be the "Commencement Date."
       The lump sum payment shall be equal to (a) the Participant's remaining
       deferred compensation account under the Plan or (b) a beneficiary's
       share of the Participant's remaining deferred compensation account
       under the Plan, whichever is applicable, reduced by a penalty equal to
       ten percent (10%) of such account which shall be forfeited to the
       Company.  However, the penalty shall not apply if the Committee
       determines, based on the advice of counsel or a final determination by
       the Internal Revenue Service or any court of competent jurisdiction,
       that by reason of the foregoing elective provisions of this Paragraph
       8 any Participant or beneficiary has recognized or will recognize
       gross income for federal income tax purposes under this Plan in
       advance of payment to him or her of Plan benefits.  The Company shall
       notify all Participants or beneficiaries of any such determination.
       Wherever any such determination is made, the Company shall refund all
       penalties which were imposed hereunder on account of making lump sum
       payments at any time during or after the first year to which such
       determination applies (I.E., the first year when gross income is




       recognized for federal income tax purposes). Interest shall be paid on
       any such refunds based on an interest factor determined under
       Paragraph 3(b) hereof.  The Committee may also reduce or eliminate the
       penalty if it determines that this action will not cause any
       Participant or beneficiary to recognize gross income for federal
       income tax purposes under this Plan in advance of payment to him or
       her of Plan benefits.

       Notwithstanding any other provision of this Plan, a penalty shall not
       apply if a retired Participant receives a lump sum distribution
       pursuant to Paragraph 5 hereof.

       Any Participant who receives a lump-sum distribution in accordance
       with this Paragraph 8 shall be prohibited from making any deferral of
       compensation under this Plan for a period of one-year commencing on
       the date on which the lump-sum distribution is made to such
       Participant."

       IN WITNESS WHEREOF, I have caused this certificate to be executed as
of August 15, 1994.

                                       National Medical Enterprises, Inc.


                                       By:   /s/ Scott M. Brown
                                          -------------------------------
                                       Name:  Scott M. Brown
                                       Title:  Secretary