I may be missing something, but it doesn't appear that it's actually possible to beat the first combat. She just does way too much damage and you do basically nothing. I even tried buying some equipment first, which kept me alive 1 turn longer, but that's it. Still saw no difference in her health bar even when I *did* deal damage.
It may be, and I may just be missing something. I don't think her dealing more damage than I heal is necessarily a balance issue. The balance issue I see is that whatever her health is, the bar doesn't appear to move regardless of how much damage you deal to her, which means either the bar is visually bugged or her health is insanely high.