Do not confuse the white/grey effluvium emitted by Vaal Hazak with the brown effluvium on the bottom floor of Rotten Vale. While both slowly drains your health, the former one (Vaal Hazak's) can stack with itself and the latter, and cannot be burnt by Torch Pods. Only the former can cause a status effect which cuts maximum health bar in half.
The status effect can be removed by consuming a nullberry. It can also be completely prevented by 3rd level skill Effluvia Resistance (found in Vaal Hazak armor, Miasma Jewels, or Miasma Charm, note it's different from Effluvial Expert). If you have not defeated Vaal Hazak or do not have the Miasma Jewels yet, you can put down a Cleanser Booster and remove the status by running into the blue spray. Weapons with Elderseal can reduce the amount of effluvium on Vaal Hazak's body (not the environment), which in turn makes close combat players less vulnerable to the status effect.
Since Vaal Hazak's effluvium can stack with itself, repeated moves from Vaal Hazak can make the health drain lethal, espeically during extended encounters. This can be countered by baiting it to another area or retreating.