Unlike Mark of Protection, Healing Hands does not nullify damage, it only heals. Therefore, against large amounts of damage, this only really serves as damage reduction. However, against large amounts of small damage (such as from pulsing AoE effects or a minion army) this spell can give vast amounts of damage reduction or even positive healing.
Healing Hands will trigger even if the damage taken was 0.
Heroes do not use Healing Hands effectively. If you want a hero to use Healing Hands, you must first select the target and manually activate it.