Treatment of dementia costs billions of dollars in long-term care and community services every year. Dementia also burdens the acute care system and may contribute to financial problems for hospitals serving large numbers of demented elderly. In a specialized geriatric medical unit devoted to acute care of the frail elderly, Alzheimer's disease and vascular and mixed dementias afflicted 63% of inpatients and were associated with excess consumption of nursing resources, complications of treatment, nosocomial infections, lengthy hospitalizations, and financial losses to the hospital. Due in part to the effects of dementia on mobility, continence, and nutrition, demented patients suffered more frequently from life-threatening infections, sepsis, iatrogenic disease, and prolonged hospital stays. Hospital losses were 75% higher for demented patients than for nondemented patients.

Dementia affected the majority of acute care patients in this study. However, it was rarely coded as an admitting diagnosis, even though it may have been the proximate cause of the medical morbidity which led to the acute hospitalization. In addition, despite the significant impact of dementia on the hospital course and costs, it was a factor in hospital reimbursement in less than one third of cases. The results indicate that dementia was not considered to be an acute diagnosis, nor was it recognized as a complex medical illness. The impact of dementia on acute hospitalization, including the mechanisms by which dementia prolongs the hospital stay, requires further investigation.