A "significant improvement" is needed in the way hospitals deliver care to people with dementia, according to a report.
While hospitals say they have policies in place, these are not always followed and simple steps are not taken that could lessen the distress to patients, most of whom are elderly.
The study said the encounter between staff and patients "is mainly task-related and delivered in a largely impersonal manner" while the hospital environment is "often impersonal".
Staff do not always greet or talk to patients during care, explaining what they were doing or offering choice. Sometimes they do not respond to patient requests for help.
The National Audit of Dementia, which covers England and Wales, found only 6% of people with dementia had their level of cognitive impairment measured on admission and discharge, while only 43% of case notes showed patients had a mental status test despite 75% of hospitals saying they had a procedure for it.
Only 9% of case notes showed patients being screened for delirium, despite 33% of hospitals saying they had policies in place.
People with dementia can become agitated, distressed or aggressive while in hospital due to the hospital environment, aspects of care, illness or injury, or their dementia getting worse.
NHS guidance says the use of antipsychotics to control these symptoms should be a last resort, but many hospitals still use them.
The audit found 28% of people with dementia received antipsychotic medication in the hospital, of which 12% were newly-prescribed the drugs while in there.
The reasons for these prescriptions were not recorded in 18% of these cases, while less than half of staff felt properly trained in dealing with challenging behaviour.
More than half (59%) of wards said personal items (such as family photographs or cards) were not put where dementia patients could see them for reassurance.
And only 26% of casenotes showed an assessment of functioning (such as basic activities of daily living, activity/exercise status, gait and balance), despite it being included in 84% of hospital procedures.
While 96% of hospital policies said they assessed nutritional status, only 70% of casenotes showed this had been done.
Furthermore, 19% of casenotes did not show the patient was asked about any continence needs and 24% did not show that the patient was asked about pain.
Only 74% of wards had a system to ensure enough staff to help dementia patients eat at mealtimes and only 5% of hospitals had mandatory training in awareness of dementia for all staff.
Overall, less than a third (32%) of staff said they had sufficient training or learning in dementia care.
Recommendations in the report include providing basic dementia training for all staff, with some ward staff receiving higher level training.
A senior clinical lead for dementia should also be in place in each hospital, with dementia champions in each department and at ward level.
The report comes after figures yesterday showed emergency hospital admissions for people with dementia have increased by 12% in the last five years.
In 2006/7 there were 17,245 emergency admissions - in 2010/11 there were more than 2,000 more.
Professor Peter Crome, chair of the national audit of dementia steering group, said: "This report provides further concrete evidence that the care of patients with dementia in hospital is in need of a radical shake-up.
"We have a provided a number of recommendations that if implemented will enable patients and their families to have confidence in their hospital treatment.
"It is good to see that several hospitals have responded to the results of the interim findings with programmes of quality improvement."
Royal College of Nursing (RCN) chief executive, Dr Peter Carter said: "It is extremely worrying that two thirds of staff found that their training and development was not sufficient.
"It is essential that all staff are supported through training, education and leadership so that they are able to provide skilled, knowledgeable care to people with dementia.
"Equally, each nurse is personally accountable for their own practice and must act promptly to raise concerns if staffing levels or other pressures are getting in the way of delivering good care."
Jeremy Hughes, chief executive of the Alzheimer's Society, said: "This shocking report proves once again that we urgently need a radical shake-up of hospital care.
"Given that people with dementia occupy a quarter of hospital beds and that many leave in worse health than when they were admitted, it is unacceptable that training in dementia care is not the norm."
Care services minister Paul Burstow said: "We set this audit up to put dementia care in hospital in the spotlight.
"It has found some excellent practice, but it has revealed far too many hospitals failing to put in place dementia friendly care."
He added: "Improving dementia care is a priority for this Government.
"That is why we are putting in place a new financial incentive for hospitals that identify patients at risk so they get the specialised care they need."