Not many employees of small UK software companies get to work for businesses that are rampaging through the US market. Not many of them get marriage proposals from women they have never met either. But that is the happy combination for the staff of Craneware, which listed on AIM last September at a price of 128p and saw its shares top 150p last week after an encouraging first set of interim results.

Craneware is serving the US hospital market. Most of the administrators with whom it deals are females. When they ring Craneware’s office in Livingstone, Scotland, they think they are talking to Sean Connery. Who can blame them? When I phone a call centre and hear a Scottish voice, it is always Claire Grogan.

But Craneware’s staff is too busy to contemplate offers of marriage. They are fully occupied managing the growth of a business that was founded back in 1999 by Keith Neilson and Gordon Craig, who now occupy the positions of chief executive and chief technology officer and own about 30% of the shares.

Determined to set up their own business they looked at a number of alternatives. But their mind was made up when they met Nora McNeill. This healthcare consultant was hired to check the records of hospitals in New Jersey. When she asked for data on billing she was presented with a print-out that she had to check manually. This did not come as any great surprise because back then almost all hospitals in the US were relying on manual methods to determine the cost of treatments and their claims for reimbursement from insurers and the public health authority. This was inefficient, but it could just about cope with a reimbursement system that was based on a cost-plus method of determining the value of dispensed treatment.

Now though the rules have changed

Since the US Outpatient Prospective Payment System was introduced in 2000, the value of treatment and consequent claim for reimbursement is based upon a schedule of agreed fees for each separate drug or procedure. Hospitals are finding it hard to cope with the extra work involved, and to make matters worse are now threatened with penalties for getting it wrong. These are no mere slaps across the wrist. In July 2006 hospital operator Tenet Healthcare was fined $900m for manipulating the government’s Medicare health insurance system to its own advantage while another hospital chain, HCA, agreed to pay the federal government $631m in respect of false reimbursement claims.

So the pressure is on hospitals to keep track of all stages of a course of medical treatment, and bill for it accurately. This is where Craneware steps in with its software packages, headed by its Chargemaster Toolkit that provides an automatic audit of a hospital’s billing and reimbursement claims, and can spot coding mistakes and mis-pricing.

Here is an example. A hospital in Indiana had been buying pacemakers. Initially these came in separate packages – the pacemaker in one and the various wires in another. The hospital claimed reimbursement for both. However the supplier then started to deliver the whole kit, pacemaker, wires and all in one pack. The hospital continued to claim the cost of a pacemaker – but because it was not receiving a separate package of wires, it did not make a claim for this part of the equipment. It lost $600,000 in consequence. Chargemaster ensures that bills and claims are accurate, meaning that the hospital receives neither too little money nor too much, and without the need for lengthy manual checks it can receive the money sooner.

Craneware has now signed up 878 hospital clients, double the number three years ago. With serious competition coming from just two players, Accuro Health Solutions and Med Assets, Craneware now has a share of about 15% of the USA’s 5,756 hospitals and with half of these still relying on manual calculations there are plenty left to pitch for. This looks like a rare example of a small software company that is conquering the mighty US market – and conquering some female hearts along the way too.