BACKGROUND: The Hospital Inpatient Enquiry (HIPE) system is an important information source for research and health service planning activities. However, as it was not designed explicitly for these purposes, some limitations exist. AIMS: To make recommendations that would increase the value of HIPE as a research and planning tool. METHODS: Experiences of using HIPE for research and planning exercises were analysed so as to identify its limitations and their impact on research and planning. RESULTS: Limitations were identified regarding data quality, policy issues and the general system. CONCLUSIONS: To increase the utility of HIPE as a research and planning tool, a number of changes are recommended, including: expanding the system to cover private hospitals and outpatient and emergency services; adopting routine small area and socio-economic coding; adopting unique personal identifiers; publishing regular detailed reports with in-depth analyses; and considering making hospital identifiers available in certain circumstances.