<PAGE>

                                    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, 1997

{   }  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, 1997     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.
Part I.  Financial Information


     Item 1.  Financial Statements

              Consolidated Balance Sheets                                1
              Consolidated Statements of Operations                      2
              Consolidated Statements of Partners' Capital               3
              Consolidated Statements of Cash Flows                      4
              Notes to Consolidated Financial Statements                5-6


     Item 2.  Management's Discussion and Analysis of
                 Financial Condition and Results of Operations          7-8



Part II.   Other Information

     1. through Item 6.                                                  9

     Signatures                                                         10






<PAGE>
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
                                             March 31,  December 31,
                                               1997       1996
Assets
Current Assets
<S>                                         <C>        <C>
 Cash and cash equivalents                  $  4,808   $  3,962
 Accounts receivable, net                      6,096      6,429
 Estimated third-party payor settlements         -          105
 Prepaid expenses                                528        514
   Total current assets                       11,432     11,010

Property and equipment, net of accumulated de 35,470     35,680

Other assets
 Goodwill, net                                 5,425      5,490
 Loan acquisition costs, net                      52         64
 Other deferred charges                            7         11
                                               5,484      5,565

   Total assets                             $ 52,386   $ 52,255

Liabilities and Partners' Capital
Current liabilities
 Current portion of long-term debt          $ 24,445   $    621
 Line of credit                                1,000        -
 Accrued compensation and related costs        1,667      2,415
 Accounts payable and other accrued expenses   3,691      2,147
 Estimated third  party payor settlements      3,007      2,958
   Total current liabilities                  33,810      8,141

Deferred management fee payable                  781        770
Loan payable to the Development General Partn    996        984
Line of credit borrowings                        -        1,000
Long-term debt                                   -       23,971
                                               1,777     26,725

Partners' capital
 General partners                               (149)      (143)
 Assignee limited partners; 1,540,040
  units issued and outstanding                16,948     17,532
   Total partners' capital                    16,799     17,389

   Total liabilities and
    partners' capital                       $ 52,386   $ 52,255

</TABLE>
See accompanying notes to financial statements

-1-

<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>
                                               1997       1996


Revenues
<S>                                         <C>        <C>
 Medicaid and Medicare patients             $  9,003   $   8,613
 Private patients                              2,846       2,873
 Investment and other income                     104         121
                                              11,953      11,607

Expenses
 Operating, including $1,542 and
  $1,210 to related parties                    9,771       9,399
 Management and administration fees
  to related parties                             762         734
 General and administrative                      177         110
 Depreciation and amortization                   489         490
 Interest expenses                               518         512
                                              11,717      11,245

Net earnings                                $    236   $     362




Net earnings per unit of assignee
 limited partnership interest               $   0.15   $    0.23

</TABLE>

See accompanying notes to financial statements

-2-

<PAGE>
MERIDIAN  HEALTHCARE  GROWTH AND INCOME FUND  LIMITED  PARTNERSHIP  Consolidated
Statements  of  Partners'  Capital For the Three Months Ended March 31, 1997 and
1996
        (Unaudited)
    Dollars in thousands
<TABLE>
<CAPTION>
                                          Assignee
                               General    Limited
                               Partners   Partners    Total



<S>                           <C>        <C>        <C>
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





Balance at December 31, 1995  $   (127)  $ 19,100   $18,973

Net earnings                         4        358       362

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

Balance at March 31, 1996     $   (131)  $ 18,640   $18,509

</TABLE>

See accompanying notes to financial statements

            -3-
<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>

                                                1997       1996

Cash flows from operating activities
<S>                                          <C>        <C>
 Net earnings                                $    236   $    362
 Adjustments to reconcile net earnings to net
  cash provided by operating activities
   Depreciation and amortization                  489        490
   Minority interest in net earnings of operating
    partnerships                                    3          4
   Increase in loan payable to Development Gen     12         13
   Increase in deferred management fee payable     11         11
   Change in other assets and liabilities
    Accounts receivable                           330        341
    Estimated third-party payor settlements       154         98
    Prepaid expenses                              (14)       135
    Accrued compensation and related costs       (748)       170
    Accounts payable and other accrued expense  1,544        905

Net cash provided by operating activities       2,017      2,529

Cash flows from investing activities-
 additions to property and equipment             (198)       (50)


Cash flows from financing activities
 Line of credit borrowings                        -          100
 Repayment of long-term debt                     (147)      (130)
 Distributions to partners                       (826)      (826)

Net cash used in financing activities            (973)      (856)

Net increase in cash and cash equivalents         846      1,623
Cash and cash equivalents
 Beginning of period                            3,962      1,539

 End of period                               $  4,808   $  3,162
</TABLE>


See accompanying notes to financial statements

-4-
<PAGE>
         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements
                                 March 31, 1997
                                   (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  1996  Consolidated  Statement  of
Operations  have been  reclassified  to  conform to the 1997  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 1996 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, 
1997 and 1996 are as follows:
<TABLE>
<CAPTION>

                                                                       1997                  1996

<S>                                                             <C>                     <C>
         Management and administration fees                     $ 762,000               $ 734,000
         Drug and medical supplies purchases                      572,000                 444,000
         Nursing and rehabilitation services                      970,000                 766,000
         Interest expense on borrowings                            23,000                  24,000
</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  $996,000 at March 31, 1997 and  $984,000 at December 31,
1996.


NOTE 3 - DEBT

At December  31, 1996,  the  Randallstown  facility  failed to meet the required
ratio of cash flow to debt service.  Effective March 14, 1997, the lender agreed
under a Limited  Forbearance  Agreement to refrain and forbear  temporarily from
exercising  and enforcing any of its remedies for a period of time ending on and
including May 15, 1997. The agreement provides that should Randallstown not meet
all its  convenants  for the quarter  ended  March 31,  1997,  the lender  shall
require  that  certain  partnerships  and/or the Fund  become  either  joint and
several co- obligors or guarantors of Randallstown's obligation,  note and loan.
The  Randallstown  facility did not meet the required ratio of cash flow to debt
service at March 31, 1997. Under the terms of the agreement, Caton Manor

                                                      -5-


<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

                   Notes to Consolidated Financial Statements
                                 March 31, 1997
                                   (Unaudited)

NOTE 3 - DEBT  (continued)

Meridian  Limited  Partnership,   Frederick  Meridian  Limited  Partnership  and
Hamilton  Meridian  Limited  Partnership  will  jointly and  severally  guaranty
Randallstown's  obligation  and will secure such guaranty with an indemnity deed
of trust lien on their respective facilities and properties.


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.



                                                      -6-

<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.

         At  December  31,  1996,  the  Randallstown  facility  did not meet its
required  ratio of cash flow to debt  service.  Effective  March 14,  1997,  the
lender  agreed  under a Limited  Forbearance  Agreement  to refrain  and forbear
temporarily  from  exercising  and enforcing any of its remedies for a period of
time ending on and  including May 15, 1997.  The agreement  provides that should
Randallstown  not meet all its  covenants  for the quarter ended March 31, 1997,
the lender shall require that certain partnerships and/or the Fund become either
joint and several co-obligors or guarantors of Randallstown's  obligation,  note
and loan. The Randallstown facility did not meet the required ratio of cash flow
to debt service at March 31, 1997. Under the terms of the agreement, Caton Manor
Meridian  Limited  Partnership,   Frederick  Meridian  Limited  Partnership  and
Hamilton  Meridian  Limited  Partnership  will  jointly and  severally  guaranty
Randallstown's  obligation  and will secure such guaranty with an indemnity deed
of trust lien on their respective facilities and properties.

         The Fund's  long-term debt is scheduled to mature February 28, 1998. As
a result  of this  maturity  date  being  less than one year from the end of the
current  reporting  period,  the Fund has  classified  the balance of this debt,
$24,445,000,  as a current  liability on its March 31, 1997 balance  sheet.  The
Fund is currently considering several financial options for the repayment of the
loan balances.

         On July 29, 1996 the Fund modified the revolving credit facility (the "
Facility") by  increasing  the maximum  amount to  $4,000,000  and extending the
maturity date until  February 28, 1998.  The Facility is designated  for working
capital  needs and  issuance of letters of credit.  The  Facility  is  primarily
secured by the accounts  receivable of the Fund. Any outstanding cash borrowings
under the  Facility  bear  interest at LIBOR plus  1.75%.  At March 31, 1997 the
outstanding   borrowings  under  this  Facility  totaled   $1,000,000  and  were
completely  repaid in April.  These  borrowings are classified as current on the
March 31, 1997 balance  sheet since the maturity date is less than one year from
the reporting period. The Fund is currently  considering  options to replace the
credit facility.

         The  State  of  North  Carolina  has  delayed  the  effective  date  of
elimination  in its  Medicaid  methodology  of the  current  reimbursement  rate
component  for equity until July 1, 1997.  Future  action by the North  Carolina
Medicaid  Agency  could  affect  the  reimbursement  component  for  equity  and
therefore reduce Medicaid reimbursement for the Fund by up to $233,750 annually.

         On or about  May 15,  1997 the Fund will  make a cash  distribution  of
$826,410  of  which  $473,031,  or  57%,  will be  funded  from  nursing  center
operations  generated  during  the  first  quarter  of  1997  after  payment  of
approximately $71,000 of upper tier expenses.

         While  the  1997  operating  budget  projected  that  operations  would
generate  sufficient  cash flow to allow  distributions  to  remain  at  current
levels,  first quarter results were significantly under budget due to lower than
projected  revenues.  Through the first  quarter,  revenues were under budget by
approximately $252,000 due to lower than projected occupancy levels. The overall
occupancy level for the seven  facilities was 93.1% versus a budgeted  occupancy
level of 95.3%. The major challenge to the Fund in the foreseeable  future is to
improve  occupancy  levels and maximize  revenues through  strategic  admissions
policies while controlling operating expenditures. While management expects both
the  occupancy  levels  and  profitability  of the Fund to  improve  during  the
remainder of the year,  future  distributions  remain dependent on the operating
performance of the  properties.  Fund  management  will review future  operating
results and  updated  projections  with  respect to future  distribution  levels
throughout the remainder of the year.



                                                      -7-

<PAGE>

         MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP

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

Results of Operations

         The Fund's patient  revenues  increased by  approximately  $363,000 (or
3.2%) for the first three months of 1997 as compared to the same period in 1996.
Approximately  $311,000 of the increase is  attributable  to room rate increases
which  resulted in an  effective  rate  increase  of 4.8%  compared to the first
quarter of 1996. Also  contributing  to the increase in patient  revenues was an
increase in Medicare  ancillary  revenues of approximately  $77,000 in the first
quarter of 1997 versus the  corresponding  period in 1996. The ancillary revenue
increase  was  primarily  a  result  of  increased  therapy  utilization.  Total
occupancy decreased slightly from 93.4% in the first quarter of 1996 as compared
to 93.1% in the first quarter of 1997.  Medicare census increased by 572 days in
the first three  months of 1997 as  compared to the first three  months of 1996.
This increase was offset  slightly by decreases in private and Medicaid  census.
Lastly,  prior year  favorable  cost  report  settlements  recorded in the first
quarter of 1997 were $37,000  higher than those recorded in the first quarter of
1996.

         First quarter 1997 operating expenses increased $372,000 (or 4%) versus
the  same  period  in 1996.  As a  percentage  of  revenue,  operating  expenses
increased to 81.8% of total  revenue in the first  quarter of 1997 from 81.0% of
total revenue for the corresponding period in 1996. Salaries and wages increased
2.9% in the first quarter of 1997 as compared to 1996 as a result of normal wage
increases.  Benefits remained flat as a result of a decrease in the unemployment
rate in the State of Maryland which affects four of the Fund's facilities.  As a
result of a shortage of  certified  nursing  assistant's  in  Maryland,  nursing
agency usage has increased by approximately $42,000 in the first quarter of 1997
as compared to 1996. Total nursing costs, as a result, are $1.87 per patient day
higher in 1997 as compared to 1996.

         Another factor  contributing to the operating  expense increase and the
drop in  profitability  was increased  ancillary  costs due to the higher acuity
levels of the residents  along with  increased  utilization.  As compared to the
last quarter of 1996, a greater percentage of the ancillaries are being utilized
by the Medicaid  population in the facilities  and are not reimbursed  under the
Medicaid programs.  On a gross revenue basis,  Medicaid ancillaries in the first
quarter of 1997 accounted for 12.5% of the total as compared to 10.5% during the
same  period in 1996.  On a per  patient  day basis,  there was an  increase  in
Medicaid  utilization  of  approximately  $3 per day.  The  effect  of this is a
revenue decline of approximately $197,000.

         General and  administrative  expenses  for the three months ended March
31,  1997  increased  $67,000 as  compared  to the same  period in 1996 of which
approximately $27,000 is due to an increase in professional and consulting fees.
In  addition,  there  was a  $10,000  increase  in legal  fees  associated  with
collection  efforts and banking  amendments,  while  facility  licenses and dues
increased by approximately $6,000.

                                                      -8-

<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








                                                        -9-

<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:    5/9/97                 By:             /s/ John M.  Prugh
                                         John M. Prugh
                                         President and Director
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




DATE:    5/9/97                 By:           /s/ Timothy M.  Gisriel
                                         Timothy M. Gisriel
                                         Treasurer
                                         Brown-Healthcare, Inc.
                                         Administrative General Partner




                                                       -10-