OBJECTIVES: To identify changes in management levels and costs for a cohort of nursing home residents admitted for Alzheimer's disease (AD) over a six-year period. METHODS: Long-term care data from Minnesota for 1995 through 2000 were examined. Nurses from Minnesota's Quality Assurance and Review Program evaluate care needs of nursing home residents annually. Residents are classified according to dependence level in each of eight activities of daily living (ADL). This ADL assessment and other factors establish the management level and reimbursement rate for care. AD cases were identified using ICD-9 principal diagnosis codes and personal identifiers. Only patients with AD who were residents throughout the six years were analyzed. Nursing home reimbursement rates for 2002 were obtained from Minnesota's Department of Human Services. Cost estimates include nursing and ancillary staff care, and room and board. Costs are reported in 2002 US$. RESULTS: Of the 2382 assessed patients with AD identified in 1995, 382 qualified for this analysis. Of those, 90% were female and the mean age was 81 years (range: 56 – 101). Behavior problems were noted in 71% in 1995 and 2000. In 1995, 25% received an antipsychotic agent regularly. This rate decreased each year and was 15% by 2000. The proportion of residents in low and medium dependency levels decreased from 59% to 16% over six years; whereas, the high dependency group rose from 41% to 84%. In 2000, significantly (p=0.000) more residents were assessed as physically and mentally incapable of self-preservation than in 1995. On average, this increase in care needs resulted in an additional annual cost of $7273 per resident by the end of the six-year period and roughly $2.6 million for the cohort. CONCLUSIONS: Patients with AD residing in nursing homes continue to deteriorate over time, resulting in a substantial increase in care needs and costs.