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         September 30, 1999

{   }  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   September 30, 1999       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>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


                                      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 Earnings                         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         9-14


     Item 3.  Quantitative and Qualitative Disclosures
                 About Market Risk                                       15

Part II.   Other Information


     Item 1. through Item 6.                                             15

     Signatures                                                          16







<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
                             (Dollars in thousands)
<TABLE>
<CAPTION>
                                                              September 30,
                                                                 1999            December 31,
                                                              (Unaudited)           1998
Assets
Current Assets
<S>                                                          <C>                 <C>
 Cash and cash equivalents                                   $     1,531         $     2,928
 Accounts receivable, net                                          7,526               7,279
 Estimated third-party payor settlements                             753                 882
 Prepaid expenses                                                    572                 565
   Total current assets                                           10,382              11,654

Property and equipment, net of accumulated depreciation           33,388              33,653

Other assets - goodwill, net                                       4,808               4,998

   Total assets                                              $    48,578         $    50,305

Liabilities and Partners' Capital
Current liabilities
 Current portion of long-term debt                           $    22,778         $       720
 Accrued compensation and related costs                              460                 941
 Accounts payable and other accrued expenses                       2,390               3,184
 Estimated third  party payor settlements                          2,328               2,093
   Total current liabilities                                      27,956               6,938

Deferred management fee payable                                      885                 852
Loan payable to the Development General Partner                    1,125               1,086
Long-term debt                                                       -                22,616
                                                                   2,010              24,554

Partners' capital
 General partners                                                   (130)               (128)
 Assignee limited partners; 1,540,040
  units issued and outstanding                                    18,742              18,941
   Total partners' capital                                        18,612              18,813

   Total liabilities and
    partners' capital                                        $    48,578         $    50,305

</TABLE>


          See accompanying notes to consolidated financial statements

                                      -3-


<PAGE>
         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
                      Consolidated Statements of Earnings
                                  (Unaudited)
                 (Dollars in thousands except per unit amounts)

<TABLE>
<CAPTION>
                                                          Three Months Ended              Nine Months Ended

                                                          September 30,   September 30,   September 30,   September 30,
                                                              1999            1998            1999            1998


Revenues
<S>                                                      <C>             <C>             <C>             <C>
 Medicaid and Medicare patients                          $      10,210   $      12,030   $      29,995   $      31,455
 Private patients                                                2,397           2,905           7,480           8,374
 Investment and other income                                        38             100             103             233
                                                                12,645          15,035          37,578          40,062

Expenses
 Operating, including $1,718,  $1,664,
  $4,563 and $5,192 to related parties                          10,067           9,998          29,383          29,835
 Management and administration fees
  to related parties                                               822             963           2,442           2,586
 General and administrative                                        232             243             720             627
 Depreciation and amortization                                     522             497           1,506           1,466
 Interest expenses                                                 427             459           1,249           1,396
                                                                12,070          12,160          35,300          35,910

Net earnings                                             $         575   $       2,875   $       2,278   $       4,152


Net earnings per unit of assignee
 limited partnership interest-basic
 (computed based on 1,540,040
  units)                                                 $        0.37   $        1.85   $        1.46   $        2.67

</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 Nine Months Ended September 30, 1999 and 1998
                                   (Unaudited)
                              Dollars in thousands
<TABLE>
<CAPTION>
                                             Assignee
                                General       Limited
                               Partners      Partners       Total


<S>                            <C>           <C>             <C>
Balance at December 31, 1998   $   (128)     $ 18,941      $18,813

Net earnings                         23         2,255        2,278

Distributions to partners           (25)       (2,454)      (2,479)

Balance at September 30, 1999  $   (130)     $ 18,742      $18,612





Balance at December 31, 1997   $   (153)     $ 16,504      $16,351

Net earnings                         42         4,110        4,152

Distributions to partners           (25)       (2,454)      (2,479)

Balance at September 30, 1998  $   (136)     $ 18,160      $18,024

</TABLE>

          See accompanying notes to consolidated financial statements

                                       -5-
<PAGE>
         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
                     Consolidated Statements of Cash Flows
                    For the Nine Months Ended September 30,
                                  (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                              1999       1998

Cash flows from operating activities
<S>                                                        <C>        <C>
 Net earnings                                              $  2,278   $  4,152
 Adjustments to reconcile net earnings to net
  cash provided by operating activities
   Depreciation and amortization                              1,506      1,466
   Minority interest in net earnings of operating
    partnerships                                                 26         45
   Increase in loan payable to Development General Partner       39         39
   Increase in deferred management fee payable                   33         31
   Change in other assets and liabilities
    Accounts receivable                                        (273)    (1,076)
    Estimated third-party payor settlements                     364     (1,887)
    Prepaid expenses                                             (7)       (60)
    Accrued compensation and related costs                     (481)      (295)
    Accounts payable and other accrued expenses                (794)     1,097

Net cash provided by operating activities                     2,691      3,512

Cash flows from investing activities-
 additions to property and equipment                         (1,051)      (395)


Cash flows from financing activities
 Loan acquistion costs                                          -          (13)
 Repayment of long-term debt                                   (558)      (548)
 Distributions to partners                                   (2,479)    (2,479)

Net cash used in financing activities                        (3,037)    (3,040)

Net increase (decrease) in cash and cash equivalents         (1,397)        77
Cash and cash equivalents
 Beginning of period                                          2,928      2,275

 End of period                                             $  1,531   $  2,352
</TABLE>


          See accompanying notes to consolidated financial statements

                                      -6-
<PAGE>
         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements
                               September 30, 1999
                                   (Unaudited)


NOTE 1 - THE FUND AND BASIS OF PREPARATION

The  Fund  owns  98.99%  limited  partnership  interests  in each  of the  seven
operating  partnerships.  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 consolidated 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. The unaudited interim financial  information  contained in the
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated financial statements contained in the 1998 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 and nine  months  ended
September 30, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
                                              Three Months Ended                  Nine Months Ended
                                      Sept. 30, 1999   Sept. 30, 1998    Sept. 30, 1999   Sept. 30, 1998

<S>                                            <C>               <C>               <C>              <C>
  Management and administration fees     $ 822,000        $ 963,000        $2,442,000       $2,586,000
  Drug and medical supplies purchases      763,000          430,000         2,133,000        1,522,000
  Nursing and rehabilitation services      955,000        1,234,000         2,430,000        3,670,000
  Interest expense on borrowings            21,000           23,000            67,000           69,000
</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 $1,125,000 at September 30, 1999 and $1,086,000 at December
31, 1998.

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
(5.34% at September  30, 1999) 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 September  30,
1999.

The Fund has classified the balance of the long-term debt as a current liability
on the  September  30, 1999  balance  sheet as a result of its February 28, 2000
maturity date. The Fund's managers are in discussion  regarding  several options
for the  extension of or refinance  of the  existing  loan  balances and line of
credit.



                                       -7-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements
                               September 30, 1999
                                   (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

    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  also extended 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 September 30, 1999, there were no outstanding borrowings under this
line of credit.

    The Fund's working capital (excluding  long-term debt) decreased $232,000 to
$5,204,000 at September 30, 1999 as compared to $5,436,000 at December 31, 1998.
The Fund  has  classified  its  long-term  debt as a  current  liability  on the
September  30, 1999 balance  sheet as a result of its February 28, 2000 maturity
date.  The Fund's  managers are pursuing a renewal  commitment  to refinance all
existing  indebtedness  including  the line of  credit  with  both the  existing
mortgagor and alternative  lenders prior to the existing  mortgage maturity date
of February 28, 2000.

    Cash flow from  operating  activities was  approximately  $2,691,000 for the
nine months  ended  September  30, 1999 as compared to  $3,512,000  for the same
period in 1998.  The  decrease is  primarily  the result of  favorable  Maryland
Medicaid  cost report  settlements  (dating  back to 1994) that were  recognized
during the third quarter of 1998.

    Cash used in investing  activities  for the nine months ended  September 30,
1999 was  $1,051,000  and is  comprised  of  improvements  to the  Fund's  seven
operating  facilities.  Cash used in  financing  activities  for the nine months
ended  September 30, 1999 included  repayment of long-term  debt of $558,000 and
distributions to partners of $2,479,000.

    The Fund believes that the  short-term  liquidity  needs will be met through
expected cash flow from operations and availability of working capital under the
existing line of credit.  Long-term liquidity needs will be met through expected
cash  flow  from  operations  and  a  refinancing  of  the  existing   long-term
indebtedness and line of credit capacity.

    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  $1,125,000  at September  30,  1999.  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 or about  November  15, 1999,  the Fund will make its third  quarter 1999
cash distribution of $826,410 to its partners.  This distribution will be funded
by third quarter 1999 operations and reserves of approximately $315,000. Through
the third quarter of 1999,  operations have funded 94% of the  distributions  to
partners  while the balance was funded by  reserves.  Preliminary  review of the
budget for the fourth quarter suggests operations from the seven nursing centers
will be sufficient to fully fund a similar distribution at year-end.

    The major  challenge  to the Fund in the  foreseeable  future is to  control
operating expenses in light of Medicare's  conversion to the Prospective Payment
System,  to maintain a favorable  quality  mix of patients  and to increase  the
overall census at each of the facilities.




                                       -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

 Three Months Ended September 30, 1999 vs. Three Months ended September 30, 1998

      Net earnings were $575,000 for the three months ended September 30,1999 as
compared  to  $2,875,000  for the same period in the prior year  representing  a
decrease of $2,300,000.

     The fund's third quarter 1999 revenues of $12,645,000  decreased $2,390,000
or 16% compared to the same period in 1998.

    Medicaid  and Medicare  revenue  decreased  $1,820,000  for the three months
ended September 30, 1999 as compared to the same period in 1998. The decrease is
primarily  the  result of  revisions  to cost  reimbursement  settlements  which
resulted in an increase  to third  quarter  1998  revenues  of  $2,408,000.  The
majority of the adjustment resulted from the favorable  resolution of a Maryland
Medicaid  issue  dating back to 1994.  Maryland  Medicaid  had proposed an audit
adjustment  reducing  the amount of cost allowed for  reimbursement  of the fees
paid to the  Fund's  manager as the state  auditor  took the  position  that the
manager  was a related  party.  Upon  appeal by the Fund,  the State of Maryland
determined  that the Fund's  manager  was not a related  party and that the fees
paid to the manager were  reimbursable  under the state Medicaid program subject
to the applicable cost center ceilings.  Contributing positively to the Medicare
and Medicaid  revenue for the third  quarter of 1999 is the Medicare  census and
Medicaid rates. Medicare revenue increased  approximately $461,000 for the third
quarter of 1999  compared to the same  period in the prior year as the  Medicare
census  increased 2,721 days or 34%.  Medicaid  revenues  increased  $127,000 as
Medicaid rates increased  approximately 4.6% for the quarter ended September 30,
1999 compared to the same period in the prior year.

     Private  revenue of  $2,397,000  for the third  quarter  of 1999  decreased
$508,000 or 17% when  compared to the third  quarter of 1998.  This  decrease is
primarily the result of a decrease in Veterans Administration (VA) patient days,
private  assisted living days and a decrease in insurance  rates.  For the third
quarter of 1999 compared to the same period in 1998 the VA and private  assisted
living census decreased 522 and 1077 days, respectively,  resulting in decreased
revenue  of  approximately   $287,000.  The  average  insurance  rate  decreased
approximately 28% for the third quarter of 1999 compared to the third quarter of
1998.  This insurance rate decline  resulted in an overall  revenue  decrease of
approximately $202,000.

 Third quarter 1999  expenses of  $12,070,000  decreased  $90,000 from the three
months ended September 30, 1998.

    Operating expenses  increased $69,000 primarily due to increased  contracted
nursing service costs, salary & wages, and overall inflationary  increases being
offset by a reduction in the cost of ancillary services. Contracted services for
nursing increased  approximately $240,000 for the three months end September 30,
1999  compared to the same period in 1998  resulting  from a  tightening  of the
labor  market.  Wages and benefits  increased  $135,000 for the third quarter of
1999  compared to same  period in 1998,  primarily  due to annual  salary & wage
increases.  Overall inflationary increases in the operating expenses resulted in
additional cost increases of approximately  $203,000 or 2% for the third quarter
of 1999  compared  to the same  period in the  prior  year.  Ancillary  expenses
overall  decreased  $509,000 for the third  quarter of 1999 compared to the same
period in 1998.  This  decrease  is  primarily  due to a decrease in the cost of
Physical,  Speech,  Occupational  and  Respiratory  therapies.  In  response  to
Medicare's  conversion to the Prospective Payment System, the contracts with the
therapy providers were re-negotiated to reduce cost.

     Management and  administrative  fees to related parties decreased  $141,000
for the three months  ended  September  30, 1999  compared to the same period in
1998. The decrease relates to reduced  management fees which are calculated as a
percentage of revenue.




                                      -10-

<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)

  Nine Months Ended September 30, 1999 vs. Nine Months Ended September 30, 1998

     Net  earnings for the nine months ended  September  30, 1999 of  $2,278,000
decreased $1,874,000 or 45.1% over the same period in 1998.

     Fund  revenues  decreased  $2,484,000  or 6.2% during the nine months ended
September  30,  1999 as  compared  to the same  period in the prior  year.  This
decrease is principally due to revisions to cost reimbursement settlements which
resulted in increased  revenues for the nine months ended  September 30, 1998 of
$2,584,000,  of which  $528,000  related to the nine months ended  September 30,
1998 and the remainder to prior years. The settlement  adjustments resulted from
a resolution  of a Maryland  Medicaid  reimbursement  issue dating back to 1994.
Maryland  Medicaid had proposed  audit  adjustments  reducing the amount of cost
reimbursed  for fees paid to the Fund's  manager.  The Fund received a favorable
settlement of this  adjustment  upon appeal.  Additionally,  overall  census has
declined  11,408 days for the nine months ended September 30, 1999 compared with
the same period in 1998.  Medicaid  and  Private  reflected  census  declines of
14,716 and 2,400 days,  respectively.  Partially  offsetting these declines were
census  increases  for  Insurance of 705 and  Medicare of 5,003.  The decline in
census resulted in a revenue  reduction of approximately  $1,686,000  during the
nine months ended September 30, 1999 as compared to the same period in the prior
year.  Medicare  B  revenue  decreased   approximately  $392,000  due  to  lower
utilization  and charges  resulting  from the January 1, 1999  transition to the
Medicare  Prospective Payment System (PPS).  Partially offsetting the decline in
census and Medicare  Part B revenue has been an overall  increase in rates which
grew   approximately  4.6%  resulting  in  increased  revenue  of  approximately
$1,650,000 for the nine months ended  September 30, 1999 as compared to the same
period in 1998.

     Overall  expenses  decreased  $610,000 or 1.7% to $35,300,000  for the nine
months ended  September 30, 1999 as compared to $35,910,000  for the same period
in 1998.

    Operating  expenses of $29,383,000  decreased $452,000 or 1.51% for the nine
months ended  September 30, 1999 as compared to the nine months ended  September
30, 1998.  This decrease is primarily  due to a decrease in ancillary  expenses.
For the nine months  ended  September  30,  1999  ancillary  expenses  decreased
$1,798,000  or 31%  compared  to the same  period  in  1998.  This  decrease  is
primarily due to a decrease in the cost of Physical,  Speech,  Occupational  and
Respiratory  therapies.  In response to Medicare's conversion to the Prospective
Payment System the contracts with the therapy  providers were  re-negotiated  to
reduce cost.  Offsetting  these cost  decreases has been an increase in Salary &
Wages and Benefits of $849,000  resulting  from annual  increases and additional
cost for contracted  nursing of approximately  $175,000.  Additionally,  overall
inflationary  increases  in operating  costs  increased  expenses  approximately
$322,000.

    Management and administrative fees to related parties decreased $144,000 for
the nine months ended  September  30, 1999  compared to the same period in 1998.
The  decrease  relates to reduced  management  fees  which are  calculated  as a
percentage of revenue.

    General and Administrative  costs increased $93,000 to $720,000 for the nine
months  ended  September  30,  1999 as  compared to the same period in the prior
year.  This  increase is  primarily  due to an increase in the cost of purchased
services in the dietary and administrative departments, an increase in the costs
for licenses and certifications and increased professional fees incurred related
to the potential sale of the Fund's nursing centers.

    Interest  expense  decreased  $147,000 for the nine months  ended  September
30,1999 as compared to the same  period in the prior year.  The  decrease is the
result of refinancing the mortgage at lower interest rates. The refinancing took
effect on February 28, 1998.



                                      -11-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


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


Legislative and Regulatory Issues

    All of the Fund's  facilities,  to the extent  required,  are licensed under
applicable  law.  State and local  agencies  survey the  facilities on a regular
basis to determine  whether the facilities are in compliance  with  governmental
operating and health  standards and conditions for  participation  in government
sponsored third party payer programs.  On occasion and in the ordinary course of
business,  the Fund's facilities  receive notices of deficiencies for failure to
comply with  various  regulatory  requirements.  In the case of the College View
facility, there have been a series of notices alleging violations.  College View
has successfully  achieved and maintained compliance with the cited deficiencies
and has received  notice from the  Department of Health and Mental  Hygiene that
the center is in substantial compliance with the requirements for Long Term Care
Facilities.

    Legislative and regulatory action has resulted in continuing  changes in the
Medicare and Medicaid reimbursement  programs. The changes have limited, and are
expected to continue to limit, payment increases under these programs. Also, the
timing of payments  made under the Medicare and Medicaid  programs is subject to
regulatory action and governmental budgetary  constraints;  in recent years, the
time period between  submission of claims and payment has increased.  Within the
statutory framework of the Medicare and Medicaid programs, there are substantial
areas subject to administrative  rulings and  interpretations  which may further
affect  payments  made under  those  programs.  Further,  the  federal and state
governments may reduce the funds available under those programs in the future or
require more stringent  utilization and quality reviews of eldercare  centers or
other  providers.  There can be no assurances that  adjustments from Medicare or
Medicaid audits will not have a material adverse effect on the Fund.

    Pursuant to the Balanced Budget Act commencing  with cost reporting  periods
beginning  on July 1,  1998,  PPS  began to be  phased  in for  skilled  nursing
facilities  at a per diem rate for all covered Part A skilled  nursing  facility
services  as well as many  services  for which  payment may be made under Part B
when a  beneficiary  who is a resident of a skilled  nursing  facility  receives
covered  skilled  nursing  facility  care.  The  consolidated  per diem  rate is
adjusted  based upon the  Resource  Utilization  Group  ("RUG").  In addition to
covering skilled nursing facility services,  this consolidated payment will also
cover  rehabilitation  and  non-rehabilitation   ancillary  services.  Physician
services,  certain nurse practitioner and physician  assistant  services,  among
others,  are not  included  in the per  diem  rate.  For the  first  three  cost
reporting  periods beginning on or after July 1, 1998, the per diem rate will be
based on a blend of a facility  specific  rate and a federal  per diem rate.  In
subsequent  periods,  and for facilities  first receiving  payments for Medicare
services  on or after  October 1, 1995,  the  federal per diem rate will be used
without any facility specific blending.

    The  Balanced  Budget Act also  required  consolidated  billing  for skilled
nursing facilities.  Under the Balanced Budget Act, the skilled nursing facility
must submit all Medicare  claims for Part A and Part B services  received by its
residents  with the  exception of  physician,  nursing,  physical  assistant and
certain  related  services,  even if such  services  were  provided  by  outside
suppliers.  Medicare will pay the skilled  nursing  facilities  directly for all
services on the consolidated bill and outside suppliers of services to residents
of the skilled nursing  facilities must collect payment from the skilled nursing
facility.  Although consolidated billing was scheduled to begin July 1, 1998 for
all services,  it has been delayed until further notice for  beneficiaries  in a
Medicare Part A stay in a skilled nursing facility not yet using PPS and for the
Medicare  Part B stay.  There can be no assurance  that the Fund will be able to
provide skilled nursing services at a cost below the established Medicare level.

    Under PPS, the reimbursement for certain speech, occupational,  physical and
respiratory  therapy  services  provided  to  nursing  facility  patients  is  a
component  of the  total  reimbursement  to the  nursing  facility  allowed  per
patient.  Medicare  reimburses  the skilled  nursing  facility  directly for all
rehabilitation  services and the outside suppliers of such services to residents
of the skilled  nursing  facility must collect  payment from the skilled nursing
facility.   Under  PPS,  a  per  provider   limit  of  $1,500   applies  to  all
rehabilitation  therapy  services  provided  under  Medicare  Part B ($1,500 for
physical  and  speech-language  pathology  services,  and a separate  $1,500 for
occupational  therapy services).  Additionally  Medicare Part B therapy services
are no longer being reimbursed on a cost basis; rather,




                                      -12-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


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


Legislative and Regulatory Issues (continued)

payment for each service provided is based on fee screen schedules  published in
November  1998. As a result of the  implementation  of PPS, the Fund has to date
experienced a substantial reduction in Medicare B therapy revenues.

    The Balanced  Budget Act also repealed the Boren  Amendment  federal payment
standard for Medicaid payments to Medicaid nursing facilities  effective October
1, 1997. The Boren Amendment  required  Medicaid payments to certain health care
providers  to be  reasonable  and  adequate  in  order  to  cove  the  costs  of
efficiently and economically  operated health care  facilities.  States must now
use a public notice and comment  period in order to determine  rates and provide
interested parties a reasonable opportunity to comment on proposed rates and the
justification for and the methodology used in calculating such rates.  There can
be no assurance  that budget  constraints or other factors will not cause states
to reduce Medicaid  reimbursement  to nursing  facilities and pharmacies or that
payments to nursing  facilities and  pharmacies  will be made on a timely basis.
The law also grants greater  flexibility to states to establish Medicaid managed
care projects without the need to obtain a federal waiver. Although these waiver
projects generally exempt  institutional care,  including nursing facilities and
institutional  pharmacy services, no assurances can be given that these projects
ultimately  will  not  change  the  reimbursement  system  for  long-term  care,
including  pharmacy services from  fee-for-service to managed care negotiated or
capitated rates.  The Fund  anticipates that federal and state  governments will
continue  to review and assess  alternative  health  care  delivery  systems and
payment methodologies.

    In July 1998, the Clinton  Administration issued a new initiative to promote
the  quality of care in nursing  homes.  This  initiative  includes,  but is not
limited  to (I)  increased  enforcement  of  nursing  home  safety  and  quality
regulations;  (ii) increased  federal  oversight of state inspections of nursing
homes;  (iii)  prosecution  of egregious  violations  of  regulations  governing
nursing  homes;  (iv) the  publication  of nursing  home  survey  results on the
Internet;  and (v)  continuation  of the  development  of the  Minimum  Data Set
("MDS"), a national automated clinical data system.  Accordingly,  with this new
initiative it may become more  difficult  for  eldercare  facilities to maintain
licensing  and  certification.  The  Fund  may  experience  increased  costs  in
connection with maintaining its licenses and certifications as well as increased
enforcement actions. In addition,  beginning January 1, 1999, outpatient therapy
services  furnished  by a skilled  nursing  facility  to a resident  not under a
covered Part A stay or to  nonresidents  who receive  outpatient  rehabilitation
services will be paid according to the Medicare Physician Fee Schedule.

Year 2000 Compliance

    The Development  General Partner ("DGP) has implemented a process to address
its Year 2000  compliance  issues.  The process  includes (i) an  inventory  and
assessment of the compliance of the essential  systems and equipment of the Fund
and of Year 2000 mission critical suppliers, customers, and other third parties,
(ii)  the  remediation  of non-  compliant  systems  and  equipment,  and  (iii)
contingency  planning.  The DGP is in the process of conducting  its  inventory,
assessment and  remediation  of its  information  technology  ("IT") systems and
equipment  and  non-IT  systems  and  equipment  (embedded  technology)  and has
completed  approximately  96% of  its  internal  inventory  and  assessment  and
approximately 80% of the systems and equipment of critical suppliers,  customers
and other third parties.

    With respect to the Year 2000 compliance of critical third parties, the Fund
derives a  substantial  portion of its  revenues  from the Medicare and Medicaid
programs.  Congress'  General  Accounting  Office ("GAO") concluded in September
1998  that it  would  be  highly  unlikely  that all  Medicare  systems  will be
compliant on time to ensure the delivery of uninterrupted  benefits and services
into the Year  2000.  While the Fund does not  receive  payments  directly  from
Medicare, but from intermediaries,  the GAO statement is interpreted to apply as
well to these intermediaries. Recently, the HCPA Administrator asserted that all
systems necessary to make payments to fiscal  intermediaries would be compliant.
The Administrator  provided further  assurance that  intermediary  systems would
also  be  compliant  well  in  advance  of  the  deadline.   Additionally,  most
intermediaries have reported to the Fund that they are either already



                                      -13-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP


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


Year 2000 Compliance (continued)

compliant or will be prior to the end of 1999.  Nonetheless,  the DGP intends to
actively  confirm the Year 2000 readiness  status for each  intermediary  and to
work  cooperatively  to ensure  appropriate  continuing  payments  for  services
rendered to all government-insured patients.

    The DGP is remediating its critical IT and non-IT systems and equipment. The
DGP has also begun contingency  planning in the event that essential systems and
equipment fail to be Year 2000  compliant.  The Fund is planning to be Year 2000
compliant for all of its  essential  systems and equipment by December 31, 1999,
although  there can be no assurance  that it will achieve its  objective by such
date or by January 1, 2000, or that such potential  non-compliance will not have
a material adverse effect on the Fund's business, financial condition or results
of  operations.  In addition  there can be no  assurance  that all of the Fund's
critical  suppliers  and other  third  parties  will be Year 2000  compliant  by
January 1, 2000, or that such potential  non-compliance will not have a material
adverse  effect on the  Fund's  business,  financial  condition  or  results  of
operations.

    The DGP currently  estimates that its aggregate  costs  directly  related to
Year  2000  compliance  efforts  will  be  approximately  $2,000,000,  of  which
approximately  $1,800,000  has been spent through  September 30, 1999. The DGP's
Year 2000  efforts are ongoing and its overall  plan and cost  estimations  will
continue to evolve, as new information becomes available. The Fund's analysis of
its Year 2000 issues is based in part on information from third party suppliers;
there can be no assurance that such information is accurate of complete.

    The failure of the DGP or third parties to be fully Year 2000  compliant for
essential systems and equipment by January 1, 2000 could result in interruptions
of normal business work  operations.  The Fund's potential risks include (i) the
inability  to deliver  patient care  related  services in the Fund's  facilities
and/or in non-affiliated  facilities,  (ii) the delayed receipt of reimbursement
from the Federal or State governments, private payors, or intermediaries,  (iii)
the failure of security systems, elevators, heating systems or other operational
systems and equipment of the Fund's facilities and (iv) the inability to receive
critical equipment and supplies from vendors.  Each of these events could have a
material  adverse  affect on the  Fund's  business,  results of  operations  and
financial condition.

    Contingency  plans for the DGP's Year  2000-related  issues  continue  to be
developed  and  include,  but are not limited to,  identification  of  alternate
suppliers,  alternate  technologies  and alternate  manual  systems.  The DGP is
planning to have contingency plans completed for essential systems and equipment
by November 30, 1999; however,  there can be no assurance that it will meet this
objective by such date or by January 1, 2000.

    The Year 2000  disclosure  set forth  above is  intended  to be a "Year 2000
Statement"  as such term is defined in the Year 2000  Information  and Readiness
Disclosure Act of 1998 (the "Year 2000 Act") and, to the extent such  disclosure
relates to Year 2000  processing of the Fund or to products or services  offered
by the Fund, is also  intended by be "Year 2000  Readiness  Disclosure"  as such
term is defined in the Year 2000 Act.




                                      -14-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP



                          PART I. FINANCIAL INFORMATION


Item 3.     Quantitative and Qualitative Disclosures About Market Risk

    The  market  risk  associated  with  financial  instruments  and  derivative
financial and commodity  instruments is the risk of loss from adverse changes in
market prices or rates.  The Fund's market risk arises  primarily  from interest
rate risk relating to its long-term borrowings which bear interest at LIBOR plus
1.55% of a designated  bank.  Long-term  borrowings  are classified as a current
liability  since they have a February 28, 2000 maturity  date. The Fund does not
expect  that it will make  borrowings  under its line of credit  and  intends to
continue  reducing  the  outstanding  balance  of its  long-term  borrowings  in
accordance with its amortization schedule. Assuming that the outstanding balance
were to remain  unchanged  from that at September  30, 1999  ($22,778,000)  a 1%
increase in the LIBOR rate of interest  would  reduce the Fund's net earnings by
approximately $229,000 on an annualized basis.





                           PART II. OTHER INFORMATION


Item 1.     Legal Proceedings

                  Inapplicable

Item 2.     Changes in Securities and Use of Proceeds

                  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:    Financial Data Schedule

                  b)  Reports on Form 8-K:     None






                                      -15-
<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:    11/10/99               By:     /s/ John M.  Prugh
                                    John M. Prugh
                                    President and Director
                                    Brown-Healthcare, Inc.
                                    Administrative General Partner




DATE:    11/10/99               By:    /s/ Timothy M.  Gisriel
                                    Timothy M. Gisriel
                                    Treasurer
                                    Brown-Healthcare, Inc.
                                    Administrative General Partner




                                      -16-