BACKGROUND: Community-based and institutional dementia care has been compared in cross-sectional studies, but longitudinal information on the effect of institutionalization on health care service utilization is sparse. METHODS: We analyzed claims data from 651 dementia patients via Generalized Estimation Equations to assess health care service utilization profiles and corresponding expenditures from four quarters before to four quarters after institutionalization. RESULTS: In all domains, utilization increased in the quarter of institutionalization. Afterwards, the use of drugs, medical aids, and non-physician services (e.g., occupational therapy and physiotherapy) remained elevated, but use of in- and outpatient treatment decreased. Cost of care showed corresponding profiles. CONCLUSION: Institutional dementia care seems to be associated with an increased demand for supportive services but not necessarily for specialized medical care.