To raise health and damage use the item modifier level exploit. The item abilities for maximum health, mana and damage are bugged and do not increment levels correctly. When you add them as a unit ability to a unit it will give them the level 1 bonus of the ability. If you raise the ability to level 2 (must be multi level) then they will still have the level 1 bonus for the ability. However if you then remove the ability from the unit it will remove the level 2 bonus of the ability leaving you with the difference between level 2 and level 1.
Level 1: +1 HP +1 Damage etc...
Level 2: 0 HP 0 Damage etc...
Give ability, raise level and remove. This should leave the unit with a permanent stat increase.
Alternatively you can use tomes but the above is faster.