FORM 10-Q



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


          QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


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

For the quarterly period ended                March 31, 1998

{   }  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to


For Quarter Ended     March  31, 1998       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)

        Registrant's Telephone Number, Including Area Code:     (410) 727-4083

                                               N/A
                      (Former Name, Former Address, and Former Fiscal Year,
                                 if Changed Since Last Report.)

  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



<PAGE>







                                                       INDEX


                                                                        Page No.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS                      2

Part I.  Financial Information


     Item 1.  Financial Statements

              Consolidated Balance Sheets                                      3
              Consolidated Statements of Operations                            4
              Consolidated Statements of Partners' Capital                     5
              Consolidated Statements of Cash Flows                            6
              Notes to Consolidated Financial Statements                     7-8


     Item 2.  Management's Discussion and Analysis of
                 Financial Condition and Results of Operations              9-10



Part II.   Other Information


     Item 1. through Item 6.                                                  11

     Signatures                                                               12







<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.


                                                        -2-

<PAGE>


MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                               March 31,   December 31,
                                                                 1998          1997
Assets
Current Assets
<S>                                                           <C>         <C>         
 Cash and cash equivalents                                    $   3,373   $      2,275
 Accounts receivable, net                                         6,721          6,437
 Estimated third-party payor settlements                            237            343
 Prepaid expenses and other current assets                          440            565
   Total current assets                                          10,771          9,620

Property and equipment, net of accumulated depreciation          34,528         34,839

Other assets
 Goodwill, net                                                    5,179          5,239
 Loan acquisition costs, net                                         --              9
                                                                  5,179          5,248

   Total assets                                               $  50,478   $     49,707

Liabilities and Partners' Capital
Current liabilities
 Current portion of long-term debt                            $     701   $        707
 Accrued compensation and related costs                             615          1,054
 Accounts payable and other accrued expenses                      2,542          2,186
 Estimated third  party payor settlements                         5,438          4,234
   Total current liabilities                                      9,296          8,181

Deferred management fee payable                                     822            812
Loan payable to the Development General Partner                   1,048          1,035
Long-term debt                                                   23,191         23,328
                                                                 25,061         25,175

Partners' capital
 General partners                                                  (155)          (153)
 Assignee limited partners; 1,540,040
  units issued and outstanding                                   16,276         16,504
   Total partners' capital                                       16,121         16,351

   Total liabilities and
    partners' capital                                         $  50,478   $     49,707
</TABLE>


          See accompanying notes to consolidated financial statements

                                      -3-

<PAGE>


MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated  Statements  of  Earnings  For the  three  months  ended  March 31,
(Unaudited) (Dollars in thousands except per unit amounts)

<TABLE>
<CAPTION>
                                                               1998      1997


Revenues
<S>                                                          <C>       <C>    
 Medicaid and Medicare patients                              $ 9,604   $ 9,003
 Private patients                                              2,792     2,846
 Investment and other income                                      76       104
                                                              12,472    11,953

Expenses
 Operating, including $1,816 and
  $1,542 to related parties                                    9,873     9,771
 Management and administration fees
  to related parties                                             798       762
 General and administrative                                      180       177
 Depreciation and amortization                                   486       489
 Interest expenses                                               539       518
                                                              11,876    11,717

Net earnings                                                 $   596   $   236




Net earnings per unit of assignee
 limited partnership interest - basic                        $  0.38   $  0.15
 (computed based on 1,540,040 units)
</TABLE>

          See accompanying notes to consolidated financial statements

                                      -4-

<PAGE>

MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
      Consolidated  Statements of Partners' Capital
    For the Three Months Ended March 31, 1998 and 1997
                       (Unaudited)
                   Dollars in thousands
<TABLE>
<CAPTION>
                                                                        Assignee
                                                             General    Limited
                                                             Partners   Partners    Total


<S>                                                         <C>        <C>        <C>    
Balance at December 31, 1997                                $   (153)  $ 16,504   $16,351

Net earnings                                                       6        590       596

Distributions to partners                                         (8)      (818)     (826)

Balance at March 31, 1998                                   $   (155)  $ 16,276   $16,121





Balance at December 31, 1996                                $   (143)  $ 17,532   $17,389

Net earnings                                                       2        234       236

Distributions to partners                                         (8)      (818)     (826)

Balance at March 31, 1997                                   $   (149)  $ 16,948   $16,799

</TABLE>


          See accompanying notes to consolidated financial statements

                                       -5-


<PAGE>


MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMTIED PARTNERSHIP
Consolidated Statements of Cash Flows
For the Three Months Ended March 31,
(Unaudited)
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                1998     1997

Cash flows from operating activities
<S>                                                           <C>      <C>   
 Net earnings                                                 $  596   $  236
 Adjustments to reconcile net earnings to net
  cash provided by operating activities
   Depreciation and amortization                                 486      489
   Minority interest in net earnings of operating
    partnerships                                                   7        3
   Increase in loan payable to Development General Partner        13       12
   Increase in deferred management fee payable                    10       11
   Change in other assets and liabilities
    Accounts receivable                                         (291)     330
    Estimated third-party payor settlements, net               1,310      154
    Prepaid expenses                                             123      (14)
    Accrued compensation and related costs                      (439)    (748)
    Accounts payable and other accrued expenses                  356    1,544

Net cash provided by operating activities                      2,171    2,017

Cash flows from investing activities-
 additions to property and equipment                            (104)    (198)


Cash flows from financing activities
 Repayment of long-term debt                                    (143)    (147)
 Distributions to partners                                      (826)    (826)

Net cash used in financing activities                           (969)    (973)

Net increase in cash and cash equivalents                      1,098      846
Cash and cash equivalents
 Beginning of period                                           2,275    3,962

 End of period                                                $3,373   $4,808
</TABLE>


          See accompanying notes to consolidated financial statements

                                      -6-


<PAGE>
                MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                                    Notes to Consolidated Financial Statements
                                                  March 31, 1998
                                                    (Unaudited)


NOTE 1 - THE FUND AND BASIS OF PREPARATION

The Fund, through its seven operating partnerships, derives substantially all of
its  revenue  from  extended  healthcare  provided to nursing  center  residents
including room and board, nursing care, drugs and other medical services.

The accompanying  financial  statements of Meridian Healthcare Growth and Income
Fund Limited  Partnership (the "Fund") do not include all of the information and
note  disclosures   normally  included  in  financial   statements  prepared  in
accordance with generally accepted accounting principles.  The unaudited interim
consolidated  financial  statements  reflect all  adjustments  which are, in the
opinion of  management,  necessary  to a fair  statement  of the results for the
interim  periods  presented.  All such  adjustments  are of a  normal  recurring
nature.  Certain amounts included in the 1997 Consolidated Statement of Earnings
have been  reclassified  to  conform  to the 1998  presentation.  The  unaudited
interim financial information contained in the consolidated financial statements
should  be  read in  conjunction  with  the  consolidated  financial  statements
contained in the 1997 Annual Report.


NOTE 2 - RELATED PARTY TRANSACTIONS

The Fund is  obligated  to pay the  Administrative  General  Partner  an  annual
administration fee of the greater of $75,000 per year or 1/2 of 1% of the Fund's
annual  revenues.  The nursing centers owned by the operating  partnerships  are
managed by Meridian  Healthcare,  Inc., an affiliate of the Development  General
Partner,  under the terms of ten year  management  agreements  which provide for
management  fees  equal to 6% of the annual  revenues  of each  nursing  center.
Certain of the operating  partnerships  also purchase drugs and medical supplies
and other services from  affiliates of the  Development  General  Partner.  Such
purchases  are in turn billed to patients or third party  payors at prices which
on average approximate the nursing center's cost.

Transactions  with these  related  parties for the three  months ended March 31,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>

                                                                     1998             1997

<S>                                                             <C>                     <C>      
         Management and administration fees                     $ 798,000               $ 762,000
         Drug and medical supplies purchases                      613,000                 572,000
         Nursing and rehabilitation services                    1,203,000                 970,000
         Interest expense on borrowings                            23,000                  23,000
</TABLE>

Loans outstanding  under an arrangement with the Development  General Partner to
fund operating  deficits  generated by the Mooresville,  Salisbury and Woodlands
nursing centers were $1,048,000 at March 31, 1998 and $1,035,000 at December 31,
1997.


NOTE 3 - DEBT

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
(5.69%  at March 31,  1998)  plus  1.55%.  The  refinancing  also  extended  the
$4,000,000  line of credit  commitment  until  February 28, 2000.  There were no
borrowings outstanding under the line of credit commitment at March 31, 1998.


                                                       -7-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements
                                 March 31, 1998
                                   (Unaudited)


NOTE 4 - NET EARNINGS PER UNIT OF ASSIGNEE LIMITED PARTNERSHIP INTEREST

Net earnings per unit of assignee limited  partnership  interest is disclosed on
the Consolidated Statements of Operations and is based upon 1,540,040 units.



                                                        -8-

<PAGE>


         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


                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  March  31,  1998,  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  interest at 9% per annum,
were  $1,048,000  at March 31, 1998.  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 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.

         On May 14, 1998, the Fund will make a cash  distribution of $826,410 to
its  partners  which  will be funded  from first  quarter  1998  nursing  center
operations after payment of approximately $72,000 of upper tier expenses.

         Based on a 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 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

Profitability  for the Fund rose to $596,000 during the first quarter of 1998 as
compared to $236,000 in the first  quarter of 1997  representing  an increase of
$360,000.  This  increase  resulted  from  both  revenue  growth  and good  cost
controls.

First  quarter  operating  results  exceeded  budget by  approximately  $181,000
primarily as a result of higher than  projected  revenues.  While overall census
numbers for the facilities were under budget for the quarter,  the per diem rate
of $128.00 was $4.00, or 3.5%, higher than projected and revenues increased as a
result.

Patient  revenues  for the Fund's  seven  operating  partnerships  increased  by
approximately  $547,000  (or 4.6%) for the three  months ended March 31, 1998 as
compared to the three months ended March 31, 1997. The increase is primarily the
result of higher room  rates,  an  increase  of  Medicaid  residents  and higher
ancillary  utilization.  Aggregate room rates increased by 7.9% for all patients
types.  Private rates increased due to a greater number of higher acuity private
pay

                                                        -9-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations


Results of Operations (continued)

residents  while  Medicaid  rates  increased due to the  recurring  July 1, 1997
increase.  Offsetting  these  favorable  variances  was a decrease in census for
Private and Medicare  residents  during the first  quarter when  compared to the
prior year. While admissions at all of the facilities continue to be strong, the
length of stay for many  residents has decreased,  resulting in higher  turnover
and decreased  census.  Management is focused on improving census levels through
aggressive marketing and strategic admission guidelines.

Operating  expenses  during  the first  quarter of 1998  increased  only 1% when
compared to similar  expenses  during the first quarter of 1997. As a percentage
of revenues,  first quarter  operating  expenses  decreased to 79% of revenue as
compared to 81% on 1997. Salaries,  wages and benefits (the largest component of
the facilities'  operating  expenses) decreased $73,000 (or 1%) during the three
months  ended  March 31,  1998 when  compared  to the same period in 1997 due to
lower cost associated with non-productive time.

Management fees (which are calculated as a percentage of revenue) increased 4.7%
during  the  first  quarter  of 1998  when  compared  to 1997 due to the rise in
patient  revenues.  General and  administrative  expenses reflect an increase of
less than 1.7% versus 1997.  While interest  expense  incurred  during the first
quarter of 1998 reflects a slight  increase when compared to 1997, we expect the
refinancing of the Fund's debt, which became  effective  February 22, 1998, will
result in an overall savings in interest expense for 1998 when compared to 1997.


                                                       -10-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP



                           PART II. OTHER INFORMATION




Item 1.     Legal Proceedings

                  Inapplicable

Item 2.     Changes in Securities

                  Inapplicable

Item 3.     Defaults upon Senior Securities

                  Inapplicable

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

                  Inapplicable

Item 5.     Other Information

                  Inapplicable

Item 6.     Exhibits and Reports on Form 8-K

                  a)  Exhibits:    None

                  b)  Reports on Form 8-K:     None




                                                       -11-

<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:    05/14/98                        By:             /s/ John M.  Prugh
                                         John M. Prugh
                                         President and Director
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




DATE:    05/14/98                        By:           /s/ Timothy M.  Gisriel
                                         Timothy M. Gisriel
                                         Treasurer
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




                                                       -12-