A system and methodology for treating patients with dementia using a methodology which includes a functional assessment of the patient to determine the patient's cognitive and daily living capabilities that is used to prepare a functional assessment of the patient to determine the patient's cognitive and daily living capabilities. The treatment uses a plurality of rooms providing living quarters the patients, with a control system executing a lighting program for a lighting system that is configured to simulate a plurality of different phases of daylight over a period of time. Furthermore, the lighting system includes a structure for adapted for simulating clouds. Also, the system provides at least one room having the lighting system and providing plants and flowing water providing an illusion of the room being outdoors.
