There is healing magic, just dig into the magic tree. I haven't actually used it, and it probably sucks as much as other magic, but it's there.
Quoting aow0526,
reply 5
What advantage does the medical pack give you when you upgrade a soldier to include it?
Medical pack gives the unit 5 extra health. Has no effect on Health Regen.
Actually, the medkit description and effect icons have +health and +regen, and I give medkits to all my units and they heal nicely, even outside of my influence. When I park them inside cities to heal they heal up and refill (squads) to full strength at a decent pace. I give one to my sov (or children who lead) too - just one - since I think the unlimited equipment thing is cheese - and I surely don't need any help beating up this game as it is.