This paper discusses the policy implications for encouraging a high quality of service provision in hospital for elderly people with dementia. Contemporary policy is examined and the continuing need for long-stay beds is highlighted, particularly in Scotland. The measurement of the quality of care in nursing is reviewed and concern is expressed over whether the patients or only the audit score will benefit from any change in practice. Ways of improving both work satisfaction and the quality of care are recommended on the basis of a study of psychogeriatric wards in NHS hospitals in Scotland.