How Healing Works
If you see the red affliction icon in the lower left corner of the HUD, it means you're in need of healing. If it's orange, then you're not afflicted yet, but are at risk for something (like hypothermia).
To bring up the affliction/healing screen, open the quick menu then select the "First Aid" option from the menu.
Some afflictions can only be healed with time or sleep. Some require medical supplies. It will tell you what you need to do on this screen.
If your affliction requires medical supplies to heal, there are usually two options. One is with medical supplies you pick up around the game, the other is with natural medicine that you can craft. When you have both types in your inventory it will give you the option of which to use.