Matters entirely on the game. Health packs work in some situations, regeneration in others, neither in a few more, both in the rest. Health packs adds to game play the concept of resource management, and a reward for exploration, etc. Better for less realistic, more pulpy or stylized games (Sometimes, not always). Regeneration is slightly more realistic, as it feels like if the bullets didn't kill you, you can go on as endorphines kick in. Is it very realistic? Not at all, but its better then walking over a red cross and your wounds magically knitting. In some games, the point is for you to be a badass who just doesn't die, via magic, a special suite, superpowers, whatever. In really wild situations, you use both effectively. And then, some games try to go the extra mile for realism, and explore more unique gameplay mechanics: VATs in Fallout 3, and the Cthulhu DCotE game come to mind. In this situation, neither system works. All depends on the game.