This article reports a naturalistic study following the closure of Fri
ern Hospital and the movement of elderly long-stay patients, who in th
e main suffered from severe dementia, to psychiatric nursing homes and
hospital beds. It describes changes in the environments and in the pa
tients' cognition, behaviour and use of medical services. The results
suggest that psychiatric nursing homes seem able to care for the major
ity if patients with severe dementia. Future studies should consider w
hether long-stay hospital beds may, however, be necessary for those wi
th both psychiatric and physical health needs, where increased contact
with health service personnel is essential. Prospective examination o
f the reasons for breakdown of placements in nursing homes and the dif
ferences between those placed in various settings may help future plan
ning of services. Relatives' opinions of the long-stay settings also r
equire study.