Healing but at a price of life points. The main benefit is that the healing done is always a greater amount than the damage done.
To maximize the effect use only against the hardiest of targets lest it die before the spell is finished. Units with damage shields, such as the Avatar of Frost, or damage reduction, such as Skeleton Warriors with Unholy Armor active, are also good targets, as damage shields will be hit first and damage reducers lessen the pain while still providing the same healing.
An alternate use of the card is to combine it with Life Weaving. While the use is situational at best, it renders damage shields, such as that of the Avatar of Frost, nearly useless, as Life Weaving ignores their effect and Blood Healing provides constant damage.
It's worth noting that if Blood Healing kills its target, that final tick will not provide health.
Targeted own unit loses 250 life points and in turn heals friendly units within a 15m radius around it for up to 860 life points in total every second. Lasts for 10 seconds or until target dies. The target unit cannot be healed while under the influence of this spell. Reusable every 5 seconds.