A Dutch village dubbed "The Truman Show" for dementia patients is getting praise from Alzheimer's experts in the U.S.

The tree-lined streets of Hogewey, a tiny village at the edge of Amsterdam, boast shops, restaurants, a movie theater and a hairdresser. Its 23 apartments are carefully crafted to feel like home to 152 residents.

But Hogewey is not a real village; it's a nursing home.

"Our director compared it to a theater," said Isabel van Zuthem, Hogewey's information officer. "The frontstage is what all the residents experience as a normal way of living, their normal home. But backstage, we are a nursing home. Everything is arranged to give all residents all the care they need. But they feel like they're living a normal life, and that's what we think is very important."

The supermarket cashier, the restaurant manager: all staff who work incognito, specially trained to care for people with dementia. Most of the residents think it's a real village.

"We wouldn't lie about it, of course. If asked, a staff member would say they're living somewhere where they get the care and support they need," said van Zuthem, adding that most residents will forget the response 15 minutes later. "People with dementia, they go back in time. They live in a different world."

Alzheimer's disease is the most common cause of dementia, affecting 5.4 million Americans. The disease swiftly robs patients of their memories and other brain functions, forcing most to live out their final years in a nursing home.

"Many times, a nursing home is very institutional: nurses walk around in white clothes; people sit together in big rooms to eat meals. We decided that's not how we would like to live when we get old," said Van Zuthem, adding that Hogewey residents are more at ease and need less medication because they feel at home.

While Hogewey has been criticized for creating a fantasy world where nurses pretend to be neighbors, experts say eldercare in the U.S. could benefit from a little improv.

"I'm personally fascinated by the concept of a self-contained village," said Marianne Smith, assistant professor of nursing specializing in dementia care at the University of Iowa. "I don't think it is living out a fantasy as much as it is accommodating the person's desire to live a normal life in a community-like environment. The program is surely better than the usual nursing homes that can resemble hospitals."

Smith said the village design allows dementia patients to experience the world as they currently understand it, even if it's in the past.

"That's the kindest, most compassionate way to care for them," she said. "The village allows them to do be comfortable where they are, and it plays to their strengths. They can still walk, they can still talk, and they can still be with other people."

But the approach isn't cheap. Hogewey cost roughly $25 million dollars to build.

"You can imagine this is not exactly a low-budget solution to a problem that is widespread and increasing daily," said Dr. Richard Caselli, professor of neurology at the Mayo Clinic in Scottsdale, Ariz. "But heck, if you can provide a safe surrogate environment where patients who cannot really think clearly can wander about enjoyably, that would seem to have many advantages."

The freedom to walk outside, shop, visit with friends or just relax can make patients happier and less agitated, meaning fewer mood-altering medications.

"Environmental approaches to reducing both cognitive and behavioral problems associated with dementia are really the key to improving quality of life for these patients without excess medication," said Dr. Paul Newhouse, director of Vanderbilt University's Center for Cognitive Medicine.

Newhouse agreed Hogewey's approach may be the kinder way to care for people with late-stage dementia.

"In fact, I would argue that ethically this is a better solution than what we currently do, namely putting patients in 'mini hospitals' and pretending that this is an appropriate care environment," he said.

Hogewey's frontstage-backstage set-up has earned it comparisons to 'The Truman Show," the Jim Carrey movie about a man unknowingly living on an elaborate film set.

"I doubt that there is any effort in the Netherlands facility to 'fool' the residents into thinking they are not being taken care of for dementia," said Dr. Mark Tuszynski, director of University of California at San Diego's Center for Neural Repair. "Instead, it sounds as though they are trying to create the most naturalistic environment possible for patients. Sounds like a great place."

Dr. Murali Doraiswamy, chief of biological psychiatry at Duke University Medical Center in Durham, N.C., said the idea could be "a game changer" in Alzheimer's care.

"The old saying, 'Treat the person and not the disease' is particularly true in end-stage dementia," he said. "All of us might actually then look forward to getting old!"

While Hogewey might be the most elaborate village-inspired nursing home, it's not the first. In fact Towsley Village Memory Care Center in Chelsea, Mich., is home to 100 dementia patients living in four distinct neighborhoods, complete with 50s-style coffee shops.

"Facilities in the U.S. have had these villages since the mid-1980s," said Geri Hall, a clinical nurse specialist at the Banner Alzheimer's Institute in Phoenix, Ariz. "The biggest practical challenge is that it requires space and special construction, potentially increasing the cost of care. I can't see many American facilities using nurses at a cash register. There are so few [registered nurses] in long-term care, they are pretty busy."

But even small-scale adjustments, like having furniture and entertainment from the familiar decades, can help Alzheimer's patients feel more at home.

"The 'deception' is really adjusting our reality to allow the person with dementia to be in a place that is comforting and safe," said Cynthia Barton, a nurse practitioner at the University of California at San Francisco's Memory and Aging Center. "It is unrealistic to think that they will be able to retain new information or remember our repeated attempts to correct them, so we emphasize strategies to make people feel safe and well cared for."

Barton said she wishes there was a place like Hogewey for her aunt, who currently lives in a nursing home in Connecticut.

"I'd love for her to be able to live in a facility like this that would so much more appropriately meet her needs," she said.

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Alzheimer's dementia - ABC News