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An observation period by specialists who can observe him first hand around the clock might actually be helpful, in my opinion.
But observing him in his normal environment, with your mother, might be more instructive, or instructive in a different way. Are there some triggers that set him off? Could things be changed to minimize those triggers?
By all means, do all you can, and encourage the care center to arrange everything they can to minimize Dad's anxiety. If having to make decisions sends him over the edge, for example, don't ask what he wants for lunch -- just give him something. This is a wonderful solution to the extent that you can discover and minimize causes.
But the ultimate cause is that the poor guy has dementia. And maybe someday we'll have more knowledge and skills for dealing with that, but right now drugs are often the method of choice because they are the only method we have.
As far as I'm concerned, if the drug works, I want it for my husband. I am not at all concerned about how many pills he takes, just that they are working, not causing unmanagable side effects, and are really improving his quality of life.
Would I rather that his dementia could be managed without drugs? Oh my, YES! Am I grateful that there are drugs available when nothing else works, and that he has a doctor who is very responsible and very proactive in searching out pharmaceutical soltions? YES, YES, YES!!
I am sorry you are facing this. My heart goes out to you, and your father, and your mother. I hope some solutions will be found to improve quality of life for all three of you!