UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION

                                              Washington, D.C. 20549


                                                     FORM 10-K

     (Mark One)
     { X }  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
               EXCHANGE ACT OF 1934 (FEE REQUIRED)

                                   For the fiscal year ended December 31, 1997

                                                        OR

     {   }  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                                        For the transition period from to

                                         Commission file number 000-17596


         Meridian Healthcare Growth and Income Fund Limited Partnership
             (Exact Name of Registrant as Specified in its Charter)


          Delaware                                           52-1549486
   (State or Other Jurisdiction of                         (I.R.S. Employer
   Incorporation or Organization)                        Identification Number)

  225 East Redwood Street, Baltimore, Maryland                  21202
   (Address of Principal Executive Offices)                   (Zip Code)

Securities registered pursuant to Section 12(b) of the Act:

            Title of each class       Name of each exchange on which registered

                         None


Securities registered pursuant to section 12(g) of the Act:

                 Assignee Units of Limited Partnership Interests
                                (Title of class)


  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                          Yes     X                      No

  As of December  31,  1997,  there were  1,538,800  Units of  Assignee  Limited
Partnership Interests held by non-affiliates of the Registrant. Because there is
not an established  public trading  market for the Units,  the aggregate  market
value  of  the  Units  held  by  non-affiliates  of  the  Registrant  cannot  be
calculated.

                                        Documents Incorporated by Reference

  The Annual Report for 1997 is incorporated by reference.


<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP



                                                       INDEX

<TABLE>
<CAPTION>

                                                                                                  Page (s)

<S>                                                                                                      <C>
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS                                                3

Part I.

         Item 1.    Business                                                                           4-5
         Item 2.    Properties                                                                         5-7
         Item 3.    Legal Proceedings                                                                    7
         Item 4.    Submission of Matters to a Vote of Security Holders                                  7


Part II.

         Item 5.    Market for Registrant's Common Equity and Related
                           Stockholder Matters                                                         7-8
         Item 6.    Selected Financial Data                                                              8
         Item 7.    Management's Discussion and Analysis of Financial
                           Condition and Results of Operations                                        9-10
         Item 8.    Financial Statements and Supplementary Data                                         11
         Item 9.    Changes in and Disagreements with Accountants on
                           Accounting and Financial Disclosure                                          11


Part III.

         Item 10.   Directors and Executive Officers of Registrant                                   11-13
         Item 11.   Executive Compensation                                                              13
         Item 12.   Security Ownership of Certain Beneficial Owners
                           and Management                                                               13
         Item 13.   Certain Relationships and Related Transactions                                      14


Part IV.

         Item 14.   Exhibits, Financial Statement Schedules and
                           Reports on Form 8-K                                                       14-16

                           Signatures                                                                17-18


</TABLE>


<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP



            Cautionary Statement Regarding Forward Looking Statements


Certain   statements   contained  herein,   including   certain   statements  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"   concerning  the  Fund's   business   outlook  or  future  economic
performances,  anticipated profitability,  revenues, expenses or other financial
items  together  with  other  statements  that  are  not  historical  facts  are
"forward-looking   statements"  as  that  term  is  defined  under  the  Federal
Securities Law. Forward-looking  statements are necessarily estimates reflecting
the best  judgement  of the party  making  such  statements  based upon  correct
information and involve a number of risks, uncertainties and other factors which
could  cause  actual  results to differ  materially  from  those  stated in such
statements.  Risks, uncertainties and factors which could affect the accuracy of
such forward looking  statements are identified in the Fund's Prospectus and the
Fund's Registration Statement filed by the Fund with the Securities and Exchange
Commission,  and forward looking statements  contained herein or in other public
statements of the Fund should be considered in light of those factors. There can
be no  assurance  that  factors  will not affect the  accuracy  of such  forward
looking statements.

                                                      -3-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


                                                      PART I


Item 1.  Business

         Meridian  Healthcare  Growth and Income Fund Limited  Partnership  (the
"Fund")  was  organized  under the laws of the State of  Delaware on December 8,
1987. The Fund will continue until December 31, 2037,  unless sooner  terminated
under  the  provisions  of the  Partnership  Agreement.  The Fund was  formed to
acquire   98.99%  of  the  limited   partnership   interests  in  seven  limited
partnerships,  each of which owns and  operates  a single  nursing  center  (the
"Facilities").

         The Fund's  objectives  are to (i) preserve  Investors'  capital;  (ii)
obtain capital  appreciation  through  increases in the value of the Facilities;
and  (iii)  provide  quarterly  cash  distributions  to  Investors  from  income
generated by the Facilities'  operating income, the income taxation of a portion
of which is anticipated to be deferred.

         The General Partners of the Fund are Brown Healthcare, Inc., a Maryland
corporation  (the  "Administrative  General  Partner")  and Meridian  Healthcare
Investments, Inc., a Maryland corporation (the "Development General Partner").

         Pursuant to the Registration Statement, a maximum of 1,540,000 assignee
units of limited  partnership  interests  ("Units")  were  registered  under the
Securities and Exchange Act of 1933, as amended. During 1988 all 1,540,000 Units
were sold,  and the Fund's net  proceeds  available  for  investment  aggregated
$31,878,000  (gross proceeds of $38,500,000  less public  offering  expenses and
acquisition  fees of $6,622,000).  The Assignor  Limited Partner also aquired 40
units of limited partnership interests in 1988.

         The Fund acquired 98.99% limited partnership  interests (the "Operating
Partnership  Interests")  in the operating  limited  partnerships  which own and
operate seven nursing center  facilities.  The  Facilities  include four nursing
centers  located in Maryland  that were  acquired  in May and June of 1988;  two
newly  constructed  nursing centers located in North Carolina that were acquired
in August,  1988;  and one newly  constructed  facility  in New Jersey  that was
acquired  in  December,  1989.  Each  operating  partnership  owns  the real and
personal property of its nursing center facility. (See Note 1, "Organization and
Operations", in Item 8, Financial Statements and Supplementary Data, and Item 2.
Properties, herein.)

         The Fund acquired the  Operating  Partnership  Interests  with offering
proceeds and certain indebtedness.

         The Fund  completed  a  sixty-bed  expansion  on its  Salisbury,  North
Carolina  facility  during  1991.  Construction  costs  for the  expansion  were
$1,354,000,  slightly  below  the $1.5  million  budget,  and were  funded  from
existing capital reserves.

         The Fund  completed  construction  of its  sixty-bed  expansion  at the
Mooresville, North Carolina facility during the first quarter of 1992. The total
cost of the addition,  including the cost of obtaining the  Certificate of Need,
was slightly  less than the $2 million  budget.  Funding for this  expansion was
provided from equity capital and capital generated from operations.

         The nursing centers owned by the operating  partnerships are managed by
and  purchase  drugs,  medical  supplies and agency  nursing and  rehabilitation
services  from  affiliates  of the  Development  General  Partner.  (See Note 3,
"Related Party  Transactions" in Item 8. Financial  Statements and Supplementary
Data, herein.)

     On November 30, 1993, Genesis Health Ventures,  Inc.  ("Genesis")  acquired
substantially all of the assets of Meridian Inc., Meridian Healthcare,  Inc. and
their affiliated entities, including all of the stock of the Development General
Partner. See Item 10. Directors and Executive Officers of Registrant, herein.

                                                      -4-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


Item 1.  Business (continued)

         The Fund's sole business is its  investment in  partnerships  which own
and  operate  nursing  centers  that  are  healthcare   facilities  licensed  by
individual states to provide long-term healthcare within guidelines  established
by the  appropriate  state  health  agencies  and as directed by each  patient's
physician.  Healthcare  and related  services  from private pay and Medicaid and
Medicare patients accounted for approximately 99% of revenues during each of the
years in the three-year period ended December 31, 1997.

         Healthcare   facilities,   including   those  owned  by  the  operating
partnerships,  are subject to extensive federal,  state and in some cases, local
regulatory  licensing  and  inspection  requirements.  In  addition,  government
revenue sources,  particularly  Medicaid and Medicare  programs,  are subject to
statutory and regulatory changes due to administrative rulings,  interpretations
of policy and determination by fiscal intermediaries,  and to government funding
restrictions, all of which may materially affect the rate of program payments to
nursing facilities.

         The nursing center Facilities face competition with similar  facilities
in their general  locations as well as the  development of other nursing centers
that  are  able to  obtain  Certificates  of  Need  and to  meet  certain  other
requirements.


Item 2.  Properties

         The Fund owns Operating Partnership Interests in operating partnerships
that  own  four  nursing  facilities  in the  State  of  Maryland,  two  nursing
facilities  in the State of North  Carolina,  and one  nursing  facility  in New
Jersey.
The Facilities are described below:


<TABLE>
<CAPTION>



                                                    Property & Equipment    Patient
                                                    (before depreciation)  Revenues
                                                    at December 31, 1997     1997

Name, Location and Description                              (Dollars in thousands)

<S>                                                         <C>            <C>
Facility 1.   Hamilton                                      $ 4,579        $ 4,269
6040 Harford Road
Baltimore City,
Maryland

A 104-bed nursing facility located on 1.06 acres, constructed in 1972 consisting
of a "T" shaped  two-story plus partial basement  masonry  structure  containing
22,082 square feet. The facility contains 104  comprehensive  care beds of which
14 are Medicare-certified. There are two private rooms, 15 semi-private rooms, 4
three-person rooms and 15 four-person rooms.


Facility 2.  Randallstown                                    10,607           9,288
9109 Liberty Road
Randallstown,
Maryland

A 250-bed nursing facility located on 2.83 acres, constructed in 1971 consisting
of a  rectangularly-shaped  two-story plus partial  basement  masonry  structure
containing  a  total  of  72,780   square  feet.   The  facility   contains  246
comprehensive care beds of which 38 are  Medicare-certified and four domiciliary
care beds. There are 111 semi-private rooms and 28 private rooms. 
</TABLE>


                                                      -5-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

Item 2.  Properties (continued)


<TABLE>
<CAPTION>

                                                 Property & Equipment       Patient
                                                 (before depreciation)     Revenues
                                                 at December 31, 1997         1997
Name, Location and Description                             (Dollars in thousands)

<S>                                                    <C>                 <C>
Facility 3.   Caton Manor                              $ 7,353             $ 7,160
3330 Wilkens Avenue
Baltimore City,
Maryland

A 184-bed nursing facility located on 0.92 acres, constructed in 1972 consisting
of an "L" shaped four-story plus basement masonry  structure  containing a total
of 48,660 square feet. All 184 beds are comprehensive  care beds of which 20 are
Medicare-certified. All rooms are semi-private.


Facility 4.  Frederick                                   7,087               7,422
(Collegeview)
400 North Avenue
Frederick,
Maryland

A 166-bed nursing facility located on 1.13 acres, originally constructed in 1966
consisting of a two-story plus partial  basement masonry  structure,  the second
floor added in 1968,  containing  a total of 52,661  square  feet.  The facility
contains 156 comprehensive care beds of which 28 are  Medicare-certified.  There
are 10 domiciliary care beds and two non-licensed  residential  apartments which
are leased to persons who do not require nursing care.



Facility 5.  Mooresville                                 5,803               6,667
550 Glenwood Road
Mooresville,
North Carolina

A 160-bed nursing facility located on 11.38 acres,  originally  constructed with
100 beds in 1988  with a  60-bed  addition  completed  in 1992  consisting  of a
one-story slab on grade  building  containing a total of 47,657 square feet. The
facility contains 130 beds for skilled care and intermediate care residents,  of
which 14 are Medicare certified. There are 30 beds in the Home for the Aged (HA)
wing. There are 8 private rooms and 76 semi-private rooms.


Facility  6.  Salisbury                                  5,659               7,221
710 Julian Road
Salisbury,
North Carolina

A 180-bed nursing  facility located on 6.02 acres,  originally  constructed with
120 beds in 1988  with a  60-bed  addition  completed  in 1991  consisting  of a
one-story slab on grade  building  containing a total of 50,500 square feet. The
facility contains 160 beds for skilled care and intermediate care residents,  of
which 28 are Medicare certified. There are 20 beds in the Home for the Aged (HA)
wing. There are 16 private rooms and 82 semi-private rooms.

</TABLE>

                                                      -6-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

Item 2.  Properties (continued)

<TABLE>
<CAPTION>

                                                 Property & Equipment       Patient
                                                 (before depreciation)     Revenues
                                                 at December 31, 1997         1997
Name, Location and Description                             (Dollars in thousands)

<S>                                                    <C>                 <C>
Facility 7.  Woodlands                                 $ 8,156             $ 7,230
1400 Woodland Avenue
Plainfield,
New Jersey

A 140-bed nursing facility located on 6.52 acres, constructed in 1989 consisting
of a two-story slab on grade building  containing a total of 54,000 square feet.
The facility  contains  120  comprehensive  nursing  home beds,  of which 27 are
Medicare certified, and 20 residential care beds. There are 12 private rooms, 46
semi-private  rooms and 9 four-bed rooms. The facility also provides space for a
child day-care program.


                                                       $49,244             $49,257

</TABLE>

Item 3.  Legal Proceedings

           The Fund is a party to litigation  arising in the ordinary  course of
business. The Fund does not believe the results of such litigation,  even if the
outcome is unfavorable to the Fund,  would have a material adverse effect on its
consolidated financial position or results of operations.


Item 4.  Submission of Matters to a Vote of Security Holders

           There were no matters  submitted to the  security  holders for a vote
during the last quarter of the fiscal year covered by this report.


                                                      PART II

Item 5.  Market for Registrant's Common Equity and Related
       Stockholder Matters

           An established public trading market for the Units does not exist and
the Fund does not  anticipate  that a public  market will  develop.  Transfer of
Units by an investor and purchase of Units by the Fund may be accommodated under
certain  terms  and  conditions.   The  Partnership  Agreement  imposes  certain
limitations  on the  transfer  of Units and may  restrict,  delay or  prohibit a
transfer primarily if:

         o   the  transfer  of Units  would  result  in 50% or more of all Units
             having  been  transferred  by  assignment  or  otherwise  within  a
             12-month period;

         o   such a  transfer  would  be a  violation  of any  federal  or state
             securities laws that may cause the Fund to be classified other than
             as a partnership for federal income tax purposes;




                                                      -7-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

Item 5.  Market for Registrant's Common Equity and Related
             Stockholder Matters (continued)

         o   such  transfers  would  cause the Fund to be treated as a "publicly
             traded  partnership" under Sections 7704 and 469(k) of the Internal
             Revenue Code; and

         o   the  transfer of Units would cause a technical  termination  of the
             Partnership within meaning of Section  708(b)(1)(A) of the Internal
             Revenue Code.

         As of  December  31,  1997,  there were  1,799  holders of Units of the
registrant,  owning an aggregate of 1,540,040 Units,  including 40 Units held by
the  Assignor  Limited  Partner.  The Fund  made  four  quarterly  distributions
totaling approximately  $3,306,000 in each of the years in the three-year period
ended December 31, 1997. See Note 5,  "Distributions  to Partners and Allocation
of Net Income", in Item 8. Financial Statements and Supplementary Data, herein.

<TABLE>
<CAPTION>
Item 6.  Selected Financial Data
                                                           Years Ended December 31,
                                               1997           1996        1995         1994         1993
                                                  (Dollars in thousands - except per Unit amounts)
Statement of Income Data

<S>                                           <C>            <C>         <C>          <C>          <C>
Net revenue                                   $49,568        $47,885     $45,398      $42,852      $38,524
Operating income before capital costs**         6,286          5,735       5,937        6,834        5,752
Net income                                      2,268          1,722       1,891        2,903        1,842

Net income per assignee Unit-basic          $    1.46      $    1.12   $    1.23    $    1.88    $    1.20


Operating Data

Payor mix (as a percent of revenue):
     Medicaid and Medicare                        77%            77%         75%          75%          72%
     Private                                      23%            23%         25%          25%          28%

Occupancy percentage                            93.2%          94.3%       94.8%        94.4%        95.8%

Patient Days Available                        429,000        431,000     430,000      433,000      433,000


Balance Sheet Data

Total assets                                  $49,707        $52,255     $51,107      $52,494      $50,580
Property and equipment, net of
     accumulated depreciation                  34,839         35,680      36,625       37,714       38,761
Long-term debt, including loan
     payable to Development General
     Partner, less current portion             24,363         25,955      25,528       25,797       26,217
Partners' capital                              16,351         17,389      18,973       20,388       20,791

Cash distributions paid per Unit:
     from operations                            $2.12       $   2.12    $   1.88     $   2.12     $   1.89
     from return of capital                      -              -            .24         -             .23

     **Capital costs include depreciation, amortization and interest expense.

</TABLE>

                                                      -8-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


Item 7. Management's Discussion and Analysis of Financial Condition
             and Results of Operations

Liquidity and Capital Resources

     The Fund has sufficient  liquid assets and other available credit resources
to  satisfy  its  operating   expenditures   and  anticipated   routine  capital
improvements at each of the seven nursing home facilities.

     On March 3, 1998, the Fund entered into a renewal commitment with a bank to
refinance all of the existing indebtedness.  Under the terms of the refinancing,
the  mortgages  will mature on February 28, 2000 and will bear interest at LIBOR
plus 1.55%. The refinancing will also extend the line of credit commitment until
February 28, 2000. The Fund has a $4,000,000  line of credit which is designated
for working capital needs and is primarily secured by the accounts receivable of
the Fund. At December 31, 1997, there were no outstanding  borrowings under this
line of credit.

     Between  1988 and 1989 the  Development  General  Partner  loaned  the Fund
$597,000 to support operating deficits  generated by the Mooresville,  Salisbury
and Woodlands nursing centers during each center's first two years of operation.
Loans outstanding under this arrangement,  including  accumulated  interest from
inception of the loan at 9% per annum, were $1,035,000 at December 31, 1997. The
Fund is obligated to repay these loans when certain specified financial criteria
are met, the most  significant of which is the payment of a preferred  return to
the assignee limited partners as defined in the Fund's partnership agreement.

     On February 13, 1998, the Fund made a cash  distribution of $826,410 to its
assignee  limited  partners,  which was funded from  nursing  center  operations
generated  during the fourth  quarter  of 1997  after  payment of  approximately
$72,000 of upper tier expenses. During 1997, nursing center operations generated
approximately  89%  of  the  total  distributions  after  payments  for  capital
improvements, long term debt principal reduction and upper tier expenses.

     Based on a  preliminary  review  of the 1998  operating  budget,  operating
results are  projected to improve over 1997 results.  Distributions  to partners
are expected to remain at current  levels and operating cash flow is expected to
completely  fund  the  distributions.  The  major  challenge  to the Fund in the
foreseeable  future is to control operating  expenses while maximizing  revenues
through strategic admissions policies.

Results of Operations

                                      December 31, 1997 vs. December 31, 1996

     Patient revenues for the Fund's seven operating  partnerships  increased by
approximately  $1,712,000  (or 3.6%) for the year  ended  December  31,  1997 as
compared  to the year  ended  December  31,  1996.  The  increase  is  primarily
attributable  to increased  room rates which  resulted  from an  effective  rate
increase  of 6%  (or  $1,767,000),  of  which  $1,466,000  relates  to  Medicaid
residents.  Effective  July 1,  1997,  the  four  Maryland  facilities  received
Medicaid  increases of 5%- 6% as compared to approximately 2.5% on July 1, 1996.
Also contributing to the Medicaid increase was a shift to higher acuity Medicaid
residents  at the  facilities.  The  remaining  rate  increase of  approximately
$296,000 was  generated  equally by Medicare and private  payor  classes.  Among
Medicare  patients,  there has been a shift to a higher acuity  resident,  while
there has been a shift in the census mix of private  payors to  facilities  with
higher base  private  rates.  Additionally,  ancillary  usage  increased in 1997
versus 1996.  Partially  offsetting these favorable  variances was a decrease of
approximately $252,000 in prior year third party cost report settlements.

Profitability  for  the  Fund  increased  approximately  $546,000  (or  32%)  to
$2,268,000 in 1997 as compared to $1,722,000  in 1996.  Operating  expenses as a
percentage of revenues remained  consistent at 80% of revenue.  Salaries,  wages
and benefits  increased  approximately  $462,000 (or 2%) during 1997 versus 1996
due to  inflationary  wage  increases.  As a result of the shortage in certified
nursing  assistants  in the State of Maryland,  nursing  agency usage  increased
approximately $109,000 in 1997 as compared to the prior year.

                                                      -9-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

Item 7. Management's Discussion and Analysis of Financial Condition
             and Results of Operations

Results of Operations (continued)

     Another factor  contributing to the operating  expense  increase was higher
ancillary utilization in 1997 as compared to the prior year. This increase was a
result of the higher  acuity  residents in the  facilities  as well as increased
utilization  by the Medicaid  population.  On a per patient day basis,  Medicaid
ancillary utilization is $1.98 higher in 1997 than in 1996.

     Interest  expense  decreased  $113,000 in 1997 as  compared  to 1996.  This
decrease is primarily due to line of credit  borrowings that were repaid in full
in April, 1997.

                                   December 31, 1996 vs. December 31, 1995

     Patient revenues for the Fund's seven operating  partnerships  increased by
approximately  $2,572,000  (or 6%) for  the  year  ended  December  31,  1996 as
compared  to the year  ended  December  31,  1995.  The  increase  is  primarily
attributable to increased  Medicare census as well as increased room rates which
resulted  in an  effective  rate  increase  of 4.1% (or  $1,592,000)  over 1995.
Continued  efforts in  Medicare  maximization  resulted  in an  increase  of the
Medicare  population in the seven facilities from 8.6% of total patient days for
1995 to 9.8% of total patient days in 1996. As a result,  ancillary  consumption
increased by $847,000 in 1996 as compared to 1995.  In addition,  revenues  were
further increased by recognition of retroactive cost settlement adjustments that
were $366,000 higher than those recognized in 1995. These positive  variances in
revenue were offset by an overall  census  decline of 1,806 patient days in 1996
as  compared  to 1995  which  accounted  for a negative  variance  in revenue of
$233,000.
Private census also declined in 1996 when compared to 1995.

     Profitability for the Fund declined  approximately  $169,000 (or 8.9%) from
$1,891,000  in 1995 to  $1,722,000  in 1996.  The decline in  profitability  was
primarily attributable to increased operating expenses which were not completely
covered by the Medicare and Medicaid reimbursement programs.  Operating expenses
as a percentage of patient  revenues  increased to 81% in 1996 from 80% in 1995.
With the continued  increase in Medicare census, the overall acuity level of the
residents was higher than in 1995 resulting in increased salaries,  benefits and
ancillary costs.  Additionally,  maintenance  costs in 1996 were $100,000 higher
than in 1995 due to the  continued  aging of the  buildings.  The four  Maryland
facilities  were built in the late 1960's and early 1970's and are  beginning to
need increasing levels of repair and maintenance.

     Also  contributing  to the  decline in  profitability  was an  increase  of
$172,000 (or 34%) in general and administrative  expenses in 1996 as compared to
1995.  The  majority  of  this  increase  was  due to  higher  professional  and
consulting costs incurred during 1996.

     Interest  expense   decreased  $84,000  (or  3.8%)  in  1996  versus  1995.
Approximately  $5.7 million of the Fund's debt bears  interest at floating rates
which were, on average, lower in 1996 than in 1995.


                                                      -10-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


Item 8.  Financial Statements and Supplementary Data

Index to Financial Statements:
                                                                     Page(s)
                                                                 Annual Report

     Independent Auditors' Report                                       3
     Consolidated Balance Sheets                                        4
     Consolidated Statements of Earnings                                5
     Consolidated Statements of Partners' Capital (Deficit)             6
     Consolidated Statements of Cash Flows                              7
     Notes to Consolidated Financial Statements                       8-15



Item 9.  Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure

None.



                                                     PART III


Item 10.  Directors and Executive Officers of Registrant

     The General Partners of the Fund are Meridian Healthcare Investments, Inc.,
the Development General Partner, and Brown Healthcare,  Inc., the Administrative
General Partner.  The Fund's principal executive offices are located at 225 East
Redwood  Street,  Baltimore,  Maryland 21202.  The General  Partners had primary
responsibility  for the  selection  and  negotiation  of  terms  concerning  the
acquisition of the Operating Partnership Interests,  selecting a manager for the
interim  investments and the structure of the Offering and the Fund. The General
Partners have primary responsibility for overseeing the performance of those who
contract  with  the  Fund  as well  as  making  decisions  with  respect  to the
financing,  sale and  liquidation  of the Fund's or the operating  partnerships'
assets.   The  General   Partners  are   responsible  for  all  reports  to  and
communications  with investors and others,  all distributions and allocations to
investors,  the  administration  of the Fund's business and all filings with the
Securities  and  Exchange  Commission  and  other  Federal  or State  regulatory
authorities.  The  Fund's  Partnership  Agreement  provides  certain  rights for
investors, which are incorporated herein by reference.

The Development General Partner

     Meridian Healthcare Investments,  Inc., the Development General Partner, is
a Maryland corporation. On November 30, 1993, Genesis acquired substantially all
the assets of Meridian,  Inc., Meridian Healthcare (" MHC") and their affiliated
entities,  including all the stock of the Fund's Development General Partner. As
part of the  acquisition,  MHC, the manager of the Fund's seven nursing centers,
continues to operate the  facilities  pursuant to management  agreements.  Since
completion of the Meridian  transaction,  Genesis  operates 320  geriatric  care
facilities (78 wholly owned, 116 jointly owned, 32 leased and 94 managed,  which
includes 51 centers managed by an unconsolidated affiliate). The five geographic
markets   that   Genesis    principally   serves   are:   New   England   Region
(Massachusetts/Connecticut/New    Hampshire);   Mid-Atlantic   Region   (Greater
Philadelphia/Delaware  Valley);  Chesapeake Region (Southern  Delaware,  Eastern
Shore  of  Maryland;  Baltimore,  Maryland/Washington  D.C./Virginia);  Southern
Region  (Central   Florida/North   Carolina);   and  Allegheny  Region  (Western
Pennsylvania/West Virginia, Ohio, Illinois and Wisconsin).


                                                      -11-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP



Item 10.  Directors and Executive Officers of Registrant (continued)

The Development General Partner (continued)

     The following  individuals  are the  directors  and  principal  officers of
Meridian Healthcare Investments, Inc.:

     Michael R. Walker,  age 49, is President and a Director of the  Development
General  Partner and is a  co-founder  of Genesis and has served as Chairman and
Chief  Executive  Officer of Genesis since its  inception in 1985. In 1998,  Mr.
Walker  became  the  Chairman  of the  Board  of  Trustees  of  ElderTrustsm,  a
healthcare  related real estate investment trust. In 1981, Mr. Walker co-founded
Health  Group  Care  Centers  ("HGCC").  At HGCC,  he served as Chief  Financial
Officer and, later, as President and Chief Operating Officer.  Prior to its sale
in 1985, HGCC operated nursing homes with 4,500 nursing beds in 12 states.  From
1978 to 1981,  Mr. Walker was the Vice President and Treasurer of AID Healthcare
Centers,  Inc.  ("AID").  AID, which owned and operated 20 nursing centers,  was
co-founded  in 1977 by Mr.  Walker as the  nursing  home  division  of  Hospital
Affiliates  International  ("HAI").  Mr.  Walker  holds  a  Master  of  Business
Administration  degree from Temple University and a Bachelor of Arts in Business
Administration  from  Franklin and Marshall  College.  Mr.  Walker serves on the
Board of Directors of Renal Treatment Centers, Inc. and the Board of Trustees of
Universal Health Realty and Income Trust.

     Richard R. Howard, age 49, is a Director of the Development General Partner
and has  served as a  Director  of Genesis  since its  inception  in 1985 and as
President  since June,  1986.  From June,  1986 through March,  1997, Mr. Howard
served as President and Chief Operating Officer of Genesis. He joined Genesis in
September,  1985 as Vice President of Development.  Mr.  Howard's  background in
healthcare  includes  two  years as the Chief  Financial  Officer  of HGCC.  Mr.
Howard's   experience   also  includes  over  ten  years  with  Fidelity   Bank,
Philadelphia, Pennsylvania and one year with Equibank, Pittsburgh, Pennsylvania.
Mr.  Howard is a graduate of the Wharton  School,  University  of  Pennsylvania,
where he received a Bachelor of Science degree in Economics in 1971.

     George V.  Hager,  Jr.,  age 42, is Vice  President  and  Treasurer  of the
Development  General  Partner and is Senior Vice  President and Chief  Financial
Officer of Genesis. Mr. Hager was previously partner in charge of the healthcare
practice for KPMG Peat Marwick LLP in the Philadelphia  office.  Mr. Hager began
his  career  at KPMG  Peat  Marwick  LLP in 1979 and has over  fifteen  years of
experience in the  healthcare  industry.  Mr. Hager  received a Bachelor of Arts
degree in  Economics  from  Dickinson  College in 1978 and a Master of  Business
Administration  degree  from  Rutgers  Graduate  School of  Management.  He is a
certified public accountant and a member of the AICPA and PICPA.

Administrative General Partner

     Brown Healthcare,  Inc., the Administrative  General Partner, is a Maryland
corporation,  and is wholly-owned by Alex. Brown Realty, Inc. The Administrative
General  Partner is  responsible  for  administering  the  business of the Fund,
including providing clerical services,  communications,  services and reports to
investors,   and  making  all  reports  and  filings  to  securities  regulatory
authorities.

     The following  individuals are the directors and principal  officers of the
Administrative General Partner:

     John  M.  Prugh,  age  49,  has  been  a  Director  and  President  of  the
Administrative  General Partner since 1988, and of Alex. Brown Realty,  Inc. and
Armata Financial Corp.  since 1984. Mr. Prugh graduated from Gettysburg  College
in 1970,  and was  designated a Certified  Property  Manager by the Institute of
Real Estate  Management in 1979. He has worked in property  management for H. G.
Smithy Co., in Washington, D.C., and Dreyfuss Bros., Inc. in Bethesda, Maryland.
Since 1977, Mr. Prugh has been involved in managing,  administering,  developing
and selling real estate  investment  projects  sponsored by Alex.  Brown Realty,
Inc. and its subsidiaries.

                                                      -12-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

Item 10.  Directors and Executive Officers of Registrant (continued)

Administrative General Partner (continued)

     Peter E.  Bancroft,  age 45, has been a Director and Vice  President of the
Administrative  General  Partner since 1988 and a Senior Vice President of Alex.
Brown Realty, Inc. and Armata Financial Corp. since 1983. Mr. Bancroft graduated
from Amherst College in 1974, attended the University of Edinburgh, and received
a J.D.  degree from the University of Virginia  School of Law in 1979.  Prior to
joining Alex. Brown Realty, Inc. in 1983, Mr. Bancroft held legal positions with
Venable, Baetjer and Howard and T. Rowe Price Associates, Inc.

     Terry F. Hall, age 51, has been the Secretary of the Administrative General
Partner and a Vice  President and  Secretary  of, and Legal  Counsel for,  Alex.
Brown  Realty,  Inc.  since 1989.  Mr. Hall  graduated  from the  University  of
Nebraska-Lincoln  in 1968,  and received a J.D.  degree from the  University  of
Pennsylvania Law School in 1973.  Prior to joining Alex.  Brown Realty,  Inc. in
1986, Mr. Hall was a Partner at the law firm of Venable, Baetjer and Howard from
1981 to 1986 and an associate at the same firm from 1973 to 1981.

     Timothy M. Gisriel,  age 41, has been the  Treasurer of the  Administrative
General Partner and of Alex. Brown Realty, Inc. and Armata Financial Corp. since
1990. He was Controller of Alex.  Brown Realty,  Inc. and Armata Financial Corp.
from 1984 through 1990.  Mr.  Gisriel  graduated from Loyola College in 1978 and
received  his  Masters  of  Business  Administration  degree  from the Robert G.
Merrick  School of Business,  University  of  Baltimore.  Prior to joining Alex.
Brown Realty, Inc. in 1984, Mr. Gisriel was an audit supervisor in the Baltimore
office of Coopers & Lybrand. He is a Maryland Certified Public Accountant.

     There is no family  relationship  among the officers  and  directors of the
General Partner.


Item 11.  Executive Compensation

     The  officers  and  directors  of the  Administrative  General  Partner and
Development General Partner received no compensation from the Fund.

     The General Partners are entitled to receive a share of cash  distributions
and a share of  profits  and losses as  described  in the  Agreement  of Limited
Partnership.  (See Note 5,  "Distributions  to Partners  and  Allocation  of Net
Income" in Item 8. Financial Statements, herein.)

     For a discussion of compensation and fees to which the General Partners are
entitled, see Item 13. Certain Relationships and Related Transactions, herein.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

     No  person  is known to the Fund to own  beneficially  more  than 5% of the
outstanding Units of the Fund.

     The  General  Partners  each  have a .5%  interest  in the Fund as  General
Partners, but do not hold any Units.

     The Assignor  Limited  Partner,  Brown  Healthcare  Holding Co.,  Inc.,  an
affiliate of the Administrative  General Partner, owns for its benefit 40 Units.
The Units held by the Assignor  Limited Partner have all rights  attributable to
such Units under the Limited  Partnership  Agreement except that these Units are
non-voting.

     There are no arrangements, known to the Fund, the operation of which may at
a subsequent date, result in a change of control of the registrant.




                                                      -13-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


Item 13.  Certain Relationships and Related Transactions

     The General  Partners and their affiliates have and are permitted to engage
in  transactions  with the Fund. For a  summarization  of fees paid during 1997,
1996 and 1995,  and to be paid to the General  Partners and their  affiliates at
December 31, 1997, see Note 3, "Related Party Transactions" in Item 8. Financial
Statements, herein.




                                                      PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a) 1.  Financial Statements:  see Index to Financial Statements and
             Supplementary Data in Item 8 on Page 11.

         2.  Financial  Statement   Schedules:   Schedule  II  -  Valuation  and
             Qualifying Accounts for the years ended December 31, 1997, 1996 and
             1995.  All  other  schedules  are  omitted  because  they  are  not
             applicable  or the required  information  is shown in the financial
             statements or notes thereto.

         3.  Exhibits:

             (3,    4) Limited  Partnership  Agreement  on pages 1 through 41 of
                    Exhibit  A  to  the  Fund's   Prospectus,   and  the  Fund's
                    Registration  Statement  on Form  S-1  (File  No.  33-19277)
                    included herein by reference.

             (13)   Annual Report for 1997.

     (b) Reports on Form 8-K:   None.

                                                      -14-


<PAGE>
Meridian Healthcare Growth and Income Fund Limited Partnership
Independent Auditors' Report

To the Partners of Meridian Healthcare Growth and Income
Fund Limited Partnership

Under date of February 6, 1998,  except for paragraph 2 of note 4 which is as of
March 3, 1998,  we  reported  on the  consolidated  balance  sheets of  Meridian
Healthcare  Growth and Income Fund Limited  Partnership  as of December 31, 1997
and 1996, and the related consolidated statements of earnings, partners' capital
(deficit)  and cash flows for each of the years in the  three-year  period ended
December  31, 1997,  as contained in the annual  report on Form 10K for the year
1997. In connection with our audits of the aforementioned consolidated financial
statements,  we  also  audited  the  related  consolidated  financial  statement
schedule in the Form 10K. This consolidated  financial statement schedule is the
responsibility  of the Fund's  management.  Our  responsibility is to express an
opinion on this consolidated  financial  statement schedule based on our audits.
In our  opinion,  such  schedule,  when  considered  in  relation  to the  basic
consolidated  financial  statements taken as a whole,  presents  fairly,  in all
material respects, the information set forth therein.

                                                      KPMG PEAT MARWICK LLP

Philadelphia, Pennsylvania
February 6, 1998






                                                       -15-

<PAGE>

Meridian Healthcare Growth and Income Fund Limited Partnership
Valuation and Qualifying Accounts
Years Ended December 31, 1997, 1996 and 1995
    (Dollars in Thousands)

          Schedule II

<TABLE>
<CAPTION>
                                   Balance at Beginning  Charged to              Balance at End
          Description                  of Period         Operations  Deductions(1)  of Period

<S>                                       <C>               <C>         <C>           <C>
Year Ended December 31, 1997              $551              351         (389)         $513
Allowance for Doubtful Accounts

Year Ended December 31, 1996              $440              376         (265)         $551
Allowance for Doubtful Accounts

Year Ended December 31, 1995              $313              375         (248)         $440
Allowance for Doubtful Accounts

(1) - Represents amounts written off as uncollectible.
</TABLE>


                                      -16-
<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP



                                                    SIGNATURES


Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                                         MERIDIAN HEALTHCARE GROWTH AND INCOME
                                             FUND LIMITED PARTNERSHIP


DATE:   3/24/98                          BY:   /s/  John M. Prugh
                                         John M. Prugh
                                         President and Director
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner



Pursuant to the requirements of the Securities  Exchange Act of 1934 as amended,
this report has been signed by the following in the  capacities and on the dates
indicated.




DATE:    3/24/98                         By:    /s/  John M. Prugh
                                         John M. Prugh
                                         President and Director
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner


DATE:    3/24/98                         By:   /s/  Peter E. Bancroft
                                         Peter E. Bancroft
                                         Vice President and Director
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner


DATE:    3/24/98                         By:   /s/  Terry F. Hall
                                         Terry F. Hall
                                         Secretary
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner


DATE:    3/24/98                         By:  /s/  Timothy M. Gisriel
                                         Timothy M. Gisriel
                                         Treasurer
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




                                                       -17-


<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


                                              SIGNATURES (continued)




DATE:  3/27/98                           BY:   /s/  Michael R. Walker
                                         Michael R. Walker
                                         President and Director
                                         Meridian Healthcare Investments, Inc.
                                         Development General Partner



DATE:  3/26/98                           BY:   /s/  Richard R. Howard
                                         Richard R. Howard
                                         Director
                                         Meridian Healthcare Investments, Inc.
                                         Development General Partner




DATE:  3/26/98                           BY:   /s/  George V. Hager, Jr.
                                         George V. Hager, Jr.
                                         Vice President and Treasurer
                                         Meridian Healthcare Investments, Inc.
                                         Development General Partner


                                                       -18-