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.

Anyway owners are increasingly calming their parrots by administering a version of the same Prozac anti-depressant drug that, according to the latest research, is no more effective than a sugar pill. TV vet Romain Pizzi tells us that tropical birds are by far the most likely to be treated for psychological difficulties. And it is not just parrots. Research for Sainsbury’s Bank reveals that 632,000 cats and dogs in this county suffer from depression.

Now if you are a cynic like me you are probably asking whether this could by any chance be related to the fact that Sainsbury’s Bank offers animal health insurance. And how on earth Sainsbury’s Bank arrived at this figure? Is the pet population passing its time by filling in on-line questionnaires? Do concerned animal welfare officers conduct home visits and have a little chat? Goodness knows! But apparently the symptoms by which you can identify a depressed pet include attacks upon the furniture, loss of appetite, incessant scratching and aggression.

Beef flavour Prozac

Nothing that a good run around in the fresh air would not cure, I would have thought. But in an age when the average adult would rather lead a life of sloth and gluttony and then trust to medicine to undo the damage, why deny this to animals? So the makers of Prozac, the US firm Eli Lilly has launched an anti-depressant for dogs. This reformulated version of Prozac comes in the form of a ‘once-a-day chewable tablet flavoured with beef.’ Mmmmm!

This whole world of pets and petting is a mystery to me. The sale of drugs, though, is a commercial activity largely carried out by quoted companies, and so does fall within my territory. And what I notice at present is that while the business of animal medicine seems to be doing very nicely and sailing through the economic squalls with barely a splash, the business of human medicine is quite different. This week we have seen a further expansion by veterinary practice owner CVS and great results from Dechra that makes and distributes drugs and other forms of treatment for animals. I also note further progress from Genus, which produces – or should I say induces – semen from highly prized bulls for sale to cattle breeders.

Problems that afflict companies engaged in the production of drugs for humans do not always apply to those that cater for animals. Drug testing need not be so extensive. Genetic manipulation is just considered to be good farming rather than some weird and alarming experiment with the species. And many of the drugs that are given to animals are just derivatives of those that have originally, and expensively, been developed for humans. So perhaps it is no surprise to find that the stock market reputation of companies concerned with animal health seems to be much rosier than that of companies in the field of human health.

Back in the 1980s I remember the time when Glaxo was the darling of the stock market. Thanks to Zantac – which I think might have been the drug that coined the phrase ‘blockbuster’ – its shares soared and the whole pharmaceutical sector attained a lofty rating never seen since. Today shares in GlaxoSmithKline, as it now is, and those of its main rival AstraZeneca are amongst the lowest rated of all the market’s blue chips and offer dividend yields of nearly 5%. What happened to all those bullish arguments about the ageing population and inevitable demand for new drugs?

Human, as opposed to animal, pharmaceuticals is a sector very much out of favor. Investors are wary of competition for high margin patented drugs from generics. And they are weary of small biotech companies gobbling up money for research without ever spewing out a profitable product. As ever though, a field of cynicism and unfulfilled promise is one in which to find cheap and unloved shares, and companies that have created business models that allay the fears and prejudice of investors.

In tomorrow’s Penny Sleuth I’ll be looking at one such company. It’s been called a “pharmaceutical speedboat”, and later this year it plans to power past the lumbering big pharma “supertankers”. I’ll show you how you can go along for the ride.