(New York Times News Service) -- The health care industry -- like so many others -- is feeling the financial pain of medical care's ballooning costs.

Hospitals, doctors' offices and health care workers are struggling with mounting medical expenses -- rising from 5 percent to 10 percent a year, by some estimates -- illustrating that even an industry with influence over the nation's growing health care tab is grappling to pay for the care it delivers to its own workers.

"We certainly note the irony," said Dr. Charles Dobis, executive director of Lansing Ophthalmology , a 200-employee physician group that has seen its health care costs more than triple in the past 10 years. "Our budgeted number for health care premiums is approaching seven figures."

To combat rising costs, major health organizations are trimming medical benefits, tacking on surcharges for smoking and passing more out-of-pocket costs onto workers. Nurses, technicians and hospital workers are paying higher copayments and deductibles.

The swelling expense of workplace coverage has some health organizations placing a greater emphasis on preventative medicine.

Many hospitals and doctors' offices are offering discounts and dollar incentives for workers who embrace healthier lifestyles.

"Health care providers are so busy taking care of others.

They're not so great at taking care of themselves," said Naren Balasubramaniam, vice president of human resources services for Henry Ford Health System in Detroit.

While these steps have become standard in other industries, they take on a new dimension when health organizations -- often thought of as providing the gold-standard of coverage -- have to make the same concessions.

"We have definitely seen an increase in our premiums every year for the last couple years," said Shelley Nimmoor, a physical therapist at Beaumont Hospitals.

Although the increases aren't breaking her personal budget, they have been noticeable. She's also seen changes in her drug coverage and is now required to fill some prescriptions in generic form or through mail order.

For many health providers, these cost-containing moves come out of necessity. They, too, have seen business taper off as a result of the recession, with many of their own patients losing coverage because of job losses.

Healthy lifestyles rewarded

Beaumont Hospitals has kept rising costs in check by shifting more out-of-pocket costs onto workers and rewarding workers for committing to wellness plans that require them to undertake fitness challenges or learn to better monitor their own medical risks, said Dan Zembrzuski , Beaumont's benefits director.

Whereas the average market rate for health premiums has been growing 8 percent annually for the private industry at large, Beaumont's moves have helped limit those increases to 4 percent a year, he said.

St. John Health in Warren has cut costs by better managing care for its most-expensive patients -- those with chronic conditions.

"We know 80 percent of costs come from 12 percent of employees," said Andrew Vosburgh , corporate medical director for St. John.

For those workers, the insurance plan pays for rides to the doctor's office and waives copayments for drugs in efforts to remove what Vosburgh describes as "barriers to getting care."

St. John and Beaumont declined to disclose how much they spend annually on employee health premiums.

Henry Ford Health System , which pays $1.28 million in benefits annually for its employees, has not only kept premium costs stable for workers who commit to healthier lifestyles but also eliminated co-payments for certain preventative visits, such as mammography, to encourage workers to be more proactive about care .

For those who haven't committed to health-management programs, out-of-pocket costs are increasing. Last year, Henry Ford introduced an annual deductible ranging from $500 to $1,000.

In the past, "it's been reactive and tinkering with copayments and deductibles, but that's not going to work," said Henry Ford's Balasubramaniam .

Costs continue to soar

Many health administrators acknowledge there is only so much they can do to counter fast-rising costs.

They are confronting an aging population and a growing demand for health care services. And medical technology continues to surge forward, promising better results but also carrying a heftier price tag.

"The system has become so complex with all these different drivers," said Vosburgh, of St. John. "It's difficult to isolate one thing and tackle that."

Vosburgh believes health organizations do have a unique role in tackling these costs -- as both providers and purchasers of medical care.

And if done right, the savings could be formidable, especially when insurance costs account for 8 percent of the annual budget, he said.

They may have little choice, industry experts said.

"We're seeing a lot of the data show that costs are escalating faster than revenues are," said Randy Fuller, a director at the Healthcare Financial Management Association, a trade group for financial executives in health care.

Given that health organizations -- like hospitals -- already tend to make slim profit margins, the ongoing erosion of the bottom line isn't sustainable, he said.

For some, the cost pressures have begun to take their toll.

Dobis, for instance, isn't sure how much longer he can afford the rising premiums at his Lansing practice. At one point, the physicians' group offered plans with little out-of-pocket expenses.

Now, it has implemented copayments and deductibles on most services, Dobis said.

"I just hope we don't get trapped in this situation," he said.

"There are only so many times you can switch plans or find something economical. There is only so much cost-sharing your employees can absorb."

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