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OBJECTIVE: This study investigated the prevalence of dementia in a general hospital, reasons for which patients with dementia were admitted, and the relationship between dementia and length of stay, cost, and in-hospital mortality rate. METHOD: The study focused on data from the hospital database on 21,251 patients aged 60 and older who were discharged in 1996 and 1997. Patients were grouped as with or without a discharge diagnosis of dementia by ICD-9-CM criteria. The groups were compared on sociodemographic characteristics, principal discharge diagnoses, lengths of stay, costs, and in-hospital mortality rates. RESULTS: The prevalence of dementia among discharged patients was 3.9% (N=823); it was dependent on age (age 60–64, prevalence=2.6%; age 85 and older, prevalence=8.9%). The primary discharge diagnoses of the groups were different. The mean length of stay was 10.4 days for patients with dementia and 6.5 days for patients without dementia. Per capita hospital costs were $4,000 higher for patients with dementia. Differences in lengths of stay and per capita costs were statistically significant after adjusting for age, race, and sex. Lengths of stay and hospital costs for patients with dementia were significantly higher for eight primary discharge diagnoses after adjusting for age, race, and sex. CONCLUSIONS: Dementia is present in a significant proportion of patients admitted to general inpatient units. Patients with dementia are admitted for different reasons than patients without dementia and appear to have longer stays, which are associated with higher costs. Efforts to identify dementia early during hospitalization could improve patient care and reduce costs.