The amount of time people with dementia stay in hospital should be cut, a report said today.
The Alzheimer's Society, which commissioned the report, said long stays in hospital had an adverse effect on the health of many patients.
It called for the NHS to cut the average hospital stay for dementia patients by one week, saving the service at least £80 million a year.
The charity, which questioned more than 2,400 NHS staff and carers in England, Wales and Northern Ireland, said the specific needs of people with dementia are often overlooked and many end up malnourished and dehydrated.
Dementia patients are also highly likely to be discharged to care homes after hospital rather than returning to their own homes.
The study found 60% entered hospital from their own home but only 36% returned.
The report found a quarter of hospital beds are occupied by people aged over 65 with dementia at any one time.
Almost half (47%) of carers said being in hospital had a "significant negative effect on the general physical health of the person with dementia that was not a direct result of the medical condition".
Complaints included patients being confined to bed and not being allowed to walk, weight loss, dehydration, pressure sores and incontinence.
One carer told how their relative went from having "a happy, carefree personality to (being) a virtual drone".
Andrew Chidgey, head of policy and public affairs at the charity, said: "Typically what we see is that people are deteriorating while in hospital because they are becoming more confused, disorientated, distressed and in some cases agitated.
"This means they are becoming dehydrated, malnourished, their dementia is becoming worse and they are taking far longer to recover from whatever they went into hospital for."
The latest study comes after a review commissioned by the Department of Health found around 144,000 people with dementia are wrongly prescribed anti-psychotic drugs, costing an estimated 1,800 lives a year.
Neil Hunt, chief executive of the Alzheimer's Society, said of the report's findings: "It really is a disgraceful situation.
"The NHS is not facing up to the scale of this challenge and not equipping its staff properly for the scale of the problem ahead."
Katherine Murphy, director of the Patients' Association, said the survey confirmed fears of a failure in the hospital care of elderly patients.
She said: "Whether it's dementia, a stroke or a broken hip that brings them into hospital, elderly patients and their relatives face the very real fear that their care will be sub-standard.
"The findings in this report are scandalous.
"Not enough help with eating. Not enough help with drinking. Not enough help with personal hygiene. Not enough help with continence.
"What exactly has the NHS done with the billions of extra investment if it isn't helping with these things?
"There is now an overwhelming amount of evidence that elderly patients are being neglected in hospitals across the NHS.
"Whether they have dementia or not, if they are in need of help with personal care many of them won't get it."
Shadow health minister Stephen O'Brien said the Government had failed to act on its promise to reform the care system.
He said: "That's why we have set out our plans to introduce a Home Protection Scheme which will help people pay for residential care if they need it, so that they don't need to be rushed into hospital inappropriately."
Care Services Minister Phil Hope said: "The National Dementia Strategy, published earlier this year, launched a major programme of work for people with dementia across the NHS, but this report is a reminder of the scale of work that still needs to be done.
"We have set priority areas for all hospitals to take urgent action, including appointing a senior member of staff to improve quality of care for people with dementia, proper training for all staff, and specialist older people's mental health teams working in hospitals.
"The Dementia Strategy is backed with substantial funding and we are appointing a National Clinical Director for Dementia to lead transformation of services.
"We expect to see urgent improvements continue so people with dementia and their carers get the best care the NHS has to offer no matter where they are or what treatment they need."
Speaking to the BBC Radio 4 Today programme, Mr Hope added: "There are people in hospital with dementia, who are not being treated necessarily for the dementia but being treated for an unrelated condition, for whom we need to improve the quality of care - and I think this comes down to leadership."