I've seen this exposed somewhere as a fake. The 'doctor' already has the 'blood' and stuff prepared. Then uses pressure with his fingers and the patient's expectations of what to feel to make the patient believe the 'doctor' is actually removing flesh from the body.
After he is done 'removing' stuff, the 'doctor' wipes off the fake blood and tells the patient he is better. Apparently this does help some people (placebo effect) but it isn't really a cure for anything.
Edit: Geez Erin you beat me by like 15 seconds.
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