We conducted a retrospective cohort study to examine whether patients with Alzheimer's disease (AD) or vascular dementia (VaD) differed in the number and type of associated comorbid conditions. In addition, we evaluated the impact of the severity of cognitive impairment on hospitalization and mortality of patients in each group. We studied 161,106 patients over age 65, with any degree of cognitive impairment, residing in any of 1,573 Medicare/Medicaid-certified nursing homes of 5 states of the USA between 1992 and 1995. Patients were assessed with the federally mandated Minimum Data Set (MDS). The MDS has been cross-linked to Medicare eligibility files and to the Medicare Provider Analysis and Review database. AD patients were younger, and more likely to be female and Caucasian than VaD patients. For comparable levels of cognitive impairment, AD patients appeared to have fewer comorbid conditions, including those that were not risk factors for VaD. In addition, patients with AD had decreased morbidity and mortality relative to patients with VaD. These findings support the hypothesis that AD patients are a healthier group of demented patients.