The aim of this review was to study the outcome of residents in a Spec
ial Dementia Unit (SDU)) in the form of a hostel for 36 people during
the first eleven pears of operation. The participants were one hundred
and seventy one residents admitted for permanent care during that per
iod The median length of stay in the hostel was 2.3 years. By the End
of the period 113 residents (83 percent of those who had completed the
ir lime in the hostel) had been transferred to nursing homes. The aver
age survival time after admission to the hostel was 1.7 years, In orde
r to accommodate those who had been transferred from the SDU about the
same number of hostel places were needed in nursing homes. We conclud
ed that admission to an SDU hostel for selected people with dementia i
s more appropriate and less costly than direct admission to a nursing
home, notwithstanding the need for subsequent nursing care for the maj
ority. Adequate subsidy should be provided by the Commonwealth Governm
ent so that voluntary associations are encouraged to set rep SDU hoste
ls for this purpose. Nursing homes should be run in association with t
hese hostels.