Ontario has eight designated Specialized Units (SUs) located in Long-Term Care (LTC) homes. Each unit serves a well-defined group of residents whose needs go beyond what regular LTC homes can offer but do not require the complexity and range of care provided in hospitals. An applied qualitative research project looked at the realities of designated SUs, explored their role in health system capacity planning, and created a tool kit to help stakeholders navigate the designation process. Results outline the benefits and challenges experienced by the existing SUs that provide care to clients with severe responsive behaviours or dialysis needs and the units' potential to address current and future healthcare system gaps. More systematic data collection, robust evaluations, and cost-benefit analyses are needed to fully understand how effectively and efficiently the SUs fulfill the outcomes desired by residents and their families, as well as how they contribute to health system efficiencies.