Objective The increasing number of people with dementia will challenge the health care system, especially acute care. Using health insurance claims data, the study objective was to examine the regional patterns of the administrative prevalence of dementia, the prevalence of dementia in hospitals and the care situation in hospitals. Methods We used 2014 claims data from AOK PLUS, the largest statutory health insurance service in Saxony. If dementia was diagnosed either in an outpatient or inpatient setting in 3 of 4 quarters in a year, a person was categorised as a dementia case (n=61,700). The analysis of health care status included 61,239 patients with dementia and 183,477 control subjects. The control group was matched using the criteria of gender, age and region of residence. Results For those older than 65 years, the overall administrative prevalence rate of dementia was 9.3%. The estimated prevalence for those in hospitals was 16.7%. In 2014, there were 33% more admissions, 36% more hospital days and 18% higher costs per person-year among people diagnosed with dementia than the control subjects. The longer annual hospital stays and the higher costs were primarily caused by the greater number of admissions of people with dementia. Inpatient service use was, compared to people without dementia, characterized by a need for care and assistance, rather than by a need for medical therapeutic and diagnostic procedures. Conclusion To improve the health care situation of people with dementia, to adapt to the challenges facing hospitals and to reduce the financial burden caused by dementia, more efforts are needed to improve the health care situation. Measures include, among others, improvements in recognition of dementia and reduction of unnecessary hospital stays.