Background: The large number of dementia cases produces a great pressure on health and social care services, which requires efficient planning to meet the needs of patients through infrastructure, equipment, and financial, technical, and personal resources adjusted to their demands. Dementia analysis requires studies with a very precise patient characterization of both the disease and comorbidities present, and long-term follow-up of patients in clinical aspects and patterns of resource utilization and costs generated. Objective: To describe and quantify direct healthcare expenditure and its evolution from three years before and up to ten years after the diagnosis of dementia, compared to a matched group without dementia. Methods: Retrospective cohort design with follow-up from 6 to 14 years. We studied 996 people with dementia (PwD) and 2,998 controls matched for age, sex, and comorbidity. This paper adopts the provider’s perspective as the perspective of analysis and refers to the costs actually incurred in providing the services. Aggregate costs and components per patient per year were calculated and modelled. Results: Total health expenditure increases in PwD from the year of diagnosis and in each of the following 7 years, but not thereafter. Health status and mortality are factors explaining the evolution of direct costs. Dementia alone is not a statistically significant factor in explaining differences between groups. Conclusion: The incremental direct cost of dementia may not be as high or as long as studies with relatively short follow-up suggest. Dementia would have an impact on increasing disease burden and mortality.