This study was conducted to analyze the medical charges of the elderly dementia inpatients, to identity their characteristics, and there by to evaluate feasibility of the per diem payment system for the patients. Data on medical charges of the patients were collected from the National Federation of Medical Insurance and sample hospitals from October through December 1997. The data were analysed in order to find the characteristics and test hypotheses postulated. The results are summarized as follows; Firstly, there was no difference statistically in between disease groups and between the dementia inpatients belonging to each disease group. Secondly, the amount of the non-insurance medical charges of the elderly dementia inpatients is considerably high compared to the insurance medical charges paid by the patient, which implies that some measures are to be prepared by the Government. Finally, medical charges per inpatient day of the dementia patients are not different statiscally by sex, by age group, and by disease group. This result supports the feasibility of the per diem payment system for the elderly dementia inpatients.