OBJECTIVE: Inappropriate prescribing is a major problem for the elderly. This research is to fill a gap in literature exploring the impact of inappropriate medication use on patient health status. METHOD: Based on the 1996 national Medical Expenditure Panel Survey (MEPS), inappropriate prescription drug use were identified using Beers criteria. Ordered probit models were estimated to quantify the impact of inappropriate drug use on patient self-perceived health status. To minimize the impact of endogeneity problem due to dynamic regression, a comprehensive set of prior health condition variables was included to capture the need conditions for medical care. Complex survey sample design was adjusted in modeling. RESULTS: As the modeling coefficient reaches the robustness, it provides strong evidence indicating a significant adverse impact of inappropriate prescription drug use on patient self-perceived health status (p <0.01). After conducting the simulation, inappropriate drug was found to increase the elderly with poor and fair health status by 2.1 and 2.2 percentage points respectively, compared to those with appropriate prescription use. Meanwhile, the same effect decreases the elderly with very-good and excellent health status by 1.9 and 2.8 percentage points respectively. CONCLUSION: This study obtained strong evidence indicating that inappropriate drug use can yield sizable adverse impact on patient health status in the elderly. The result also helps to validate the Beers criteria as valid proxy indicators of poor prescribing practices leading to deterioration of health status. Therefore, systematic policy actions are warranted to reduce system medical errors in general and inappropriate prescribing in particular.