Over a quarter of hospitalisations of older Australians maybe caused by poor medication-related processes of care before admission, at an annual cost of $300 million, according to new research published in the Medical Journal of Australia.

Dr Gillian Caughey and colleagues from the University of South Australia and the BUPA Health Foundation used data from the Department of Veterans' Affairs from between July 2007 and June 2012, to assess the prevalence of suboptimal medication-related processes of care before hospitalisation of 83 430 older patients.

"The overall proportion of hospitalisations that were preceded by suboptimal medication-related processes of care was 25.2%", the authors reported.

Of those hospitalised for fractures following a fall, 85.4% were patients aged 65 years or older who had been prescribed a falls-risk medicine before admission; 19.7% and 17.2% of fracture hospitalisations, respectively, were for men and women who had a history of osteoporosis but had not received medication for it.

Seventeen per cent of patients hospitalised for chronic heart failure "had not been dispensed an angiotensin-converting enzyme inhibitor (ACEI) or an angiotensin receptor blocker (ARB) in the 3 months before admission", the authors wrote.

"About one in 10 admissions for renal failure occurred in patients with a history of diabetes who had not received a renal function test in the year before admission and were not dispensed an ACEI or ARB."

The researchers developed a new set of "evidence-based medication-related indicators of suboptimal processes of care before hospitalisation that are specific to the Australian health care setting" which they believe can be used to help reduce health care costs and improve patient outcomes.

"Failure to implement appropriate patterns of care suggests that an opportunity to improve health care outcomes is being missed", they wrote.

"The results [of this study] could be used to inform and focus the development of interventions and efforts to improve the quality of health care delivery, potentially reducing morbidity and health care costs."