Objectives: The aim of this study was to understand the willingness for downward referral among older adults who were hospitalized in the year before the survey and to explore its influencing factors. Methods: The sample was randomly selected by the multi-stage sampling method. A structural questionnaire was used to collect data from participants age 60 and above in Shandong, China, during August 2017. Data were analyzed by using descriptive statistics, one-way ANOVA, chi-square test, and multinomial logistic regression. Results: Of 1198 participants who were hospitalized in the year before the survey, 28.7% self-initiated downward referral, and 33.9% were willing to accept downward referral after a doctor’s advice. Multinomial logistic regression results showed that self-rated health, treatment effect in primary medical institutions, preference for outpatient service, choice of inpatient service, general understanding of essential medicines, the cost of essential medicines after zero-markup policy, and satisfaction with essential medicines’ reimbursement policy significantly correlated with older adults’ willingness for downward referral. Conclusions: The proportion of older adults who self-initiated downward referral was less than one-third. Doctors’ advice plays an important role in willingness for downward referral. More attention should be paid to improving the treatment effect of primary medical institutions, increasing the benefits of zero-markup policy, and ensuring a high reimbursement for the downward referral to work alongside doctors’ advice.