Objective To investigate the long-term effect of medically serious adverse medical events (AMEs) among older adults.

Methods We linked nationally representative survey and claims data from the Medicare Current Beneficiary Survey (1998–2004) with non-response files (1999–2005) and the Area Resource File, providing 12 541 beneficiaries with 428 373 person-months for analysis. Latent class analysis was used to assign severity status to episodes. Multinomial logistic regression was used to identify AME risk factors. The long-term consequences of AMEs on Medicare expenditures were examined by population average models. Survival analyses examined the long-term risk of death.

Results Nearly 19% of participants experienced at least one AME, with 62% from outpatient claims. The risk of AMEs is greater among participants in poorer health, and increases with comorbidity and with impairment in performing activities of daily living or instrumental activities of daily living. Medicare expenditures during an AME episode increased sharply and remained higher than what would have otherwise been expected in quarters following an AME episode, and failed to return to pre-AME expenditure levels. Differences in survival rates were observable long after the AME episode concluded, with only 55% of the patients sustaining an AME surviving to the end of the study. In contrast, nearly 80% of those without an AME were estimated to have survived.

Conclusions The impacts of AMEs are observable over extended periods of time and are associated with considerable excess mortality and costs. Efforts to monitor and prevent AMEs in both acute care and outpatient settings are warranted.