The spiralling cost of caring for dementia patients – estimated to cost around £27billion-a- year by 2018 is to be the subject of a major inquiry by MPs and peers.
The All-Party Parliamentary Group on Dementia will look at how funds could be spent more effectively.
Dementia care in the UK is currently estimated to cost £20bn a year, and is likely to rise to around £27bn by 2018.
However a report from last year by the Alzheimer's Society suggested that at least £80m a year could be saved if people with dementia were able to leave hospital just one week earlier.
Research also shows that if the government achieves its target of reducing the use of anti-psychotic drugs by two-thirds, this would save £55m every year.
Peers and MPs point to a report by the influential health think-tank the Kings Fund which illustrates existing money-saving programmes, such as a care home liaison team in Doncaster, which cut hospital admissions by 75% in a year.
It also detailed the work of a Leeds-based mental health liaison service, which had reduced hospital admissions and enabled people to be discharged earlier.
The average length of hospital stays fell by 54%, saving 1,056 bed-days per year.
Baroness Sally Greengross, chair of the all-party group, said: "As the number of people with dementia rises the financial burden will only increase. In this difficult economic climate, it's imperative that money is spent wisely.
"We know that it's possible to create cost savings and deliver better quality of care for people with dementia.
"We want people to share ideas and practical examples so that the NHS, local authorities and others can deliver the best care at the right price."
The inquiry is calling for evidence from health and social care providers, people with dementia and leading organisations. It then aims to promote the examples of best practice for use across the UK.