In a damning report published this week, the watchdog says that, as with cancer 50 years ago, there are few available treatments for dementia and patients are often not given a diagnosis for fear of causing distress.
Dementia services are not delivering value for money, the report says, with diagnoses made late if at all.
It states that the average reported time to diagnose the disease in the UK is up to twice as long as in some European countries and that only a third to a half of people with dementia receive a formal diagnosis.
Potential for savings
NAO director of health Karen Taylor, the lead on the report, said the research showed early diagnosis and treatment could save money, with bed days being cut and hospital admissions avoided through home support.
The report recommends the Department of Health should consider a national campaign to raise awareness of dementia. It says it should work with the National Institute for Health and Clinical Excellence and the Social Care Institute for Excellence to develop generic advice.
The report says there are not enough GPs with a special interest in dementia to make use of the tests and diagnostic tools available.
Ms Taylor said: 'Under Our Health, Our Care, Our Say and care closer to home, it's up to the local health economy to set treatment priorities.
'We have to accept that the DoH's position is not to set targets any more. [We must] use the levers that they have to influence change.'
Mental Health Foundation chief executive Andrew McCulloch said: 'We have always called for much earlier diagnosis. There needs to be more effort in treatment to slow progress.'