UNDER CURRENT law, when the owners of a nursing home in the District refuse to make necessary improvements, the city's only recourse is to shut the home down. That solution poses an obvious problem of its own. Council member Polly Shackleton, responding to reports of squalor and neglect in some homes, has introduced a bill that would allow the city the option of fining nursing home owners (up to $5,000 a day) for failure to make required improvements. The bill would also have the District government conduct inspections almost on demand -- whenever residents of a home or their legal representatives request one.

A turn toward "intermediate" sanctions of this kind strikes us as a constructive step. It's also right that residents of nursing homes -- many of them inevitably somewhat helpless -- should have some means of calling for help when they feel their interests are ignored. Mrs. Shackleton's otherwise laudable proposal, however, does not address the difficult problem of higher costs.

The nursing home bill in the District is mostly paid through Medicaid, the large federal-state health care program for the poor. The city government's share of Medicaid payments to nursing homes will be $21.9 million this fiscal year, and is calculated to jump by half to an estimated $31.7 million in fiscal 1986. This makes it already one of the fastest growing items in the city budget. Moreover, the federal share of Medicaid costs has been declining, from 50 percent three years ago to less than 47 percent now. District taxpayers pay the rest. It is easy to call for better nursing home care, but harder to finance it.

A related question has to do with standards. The Shackleton bill says that the city must follow up on a complaint within two weeks or explain why it feels no inspection is warranted. But what standards would be used in deciding whether to respond to calls by residents or their representatives for inspections? And if some fault were found with a facility, what would be regarded as constituting a fair improvement? These are the kinds of questions that have to be answered if the quality of life for nursing home residents is to be improved in a reasonable way.