Translation:Everyone knows that he is a bad medic.
Here, всем is dative of все 'everyone'. Literally, the sentence reads 'to-everyone, it-is-known, that he [is a] bad medic'.
Всем can also be instrumental of всё 'everything' (which is often written все, because dots over ё are often omited). These forms look the same, but usually you can understand what is meant by context.
The sentence does not sound well in either Russian or English, so it's hard to say what exactly the authors meant. That said, the word "медик" in Russian is broader than just a physician, it includes paramedics and nurses. Moreover, because no Russian speaker in his or her right mind will call a normal medical doctor "медик", the word is mostly used for paramedics and emergency doctors.
In Britain, the formal use of the word "medic" is to refer to unqualified potential-doctors-to-be, ie those who are currently studying medicine at university.
However, there is also a wide informal use of "medic" in fields such as online gaming, wherein a team might have an assigned "medic" whose job it is to keep the other players alive. I think this comes from popular portrayal of such figures in movies etc. I'm not sure what the American Army calls the people who give emergency treatment to wounded soldiers on the battlefield, but in the British Army, the job title is "Combat Medical Technician", often shortened to "Combat Med Tech" or simply (and most commonly) "CMT". We don't tend to say "medic".
As I say though, popular parlance may include the use of the word "medic" for this role, and certainly it's widely understood that way.
Yes, in the US you would still refer to a combat/field medic. I actually saw the word on the US Army website when you got me curious to make sure I wasn't doing like you and going off of the Hollywood portrayal.
That said, the more I think about it, the more I think THIS particular sentence is indeed a gaming reference, because if we were talking about a real Army medic, this would beg the question of why he wasn't disciplined or removed from that position. ;-)
In my practice, «медик» is used by nurses who're not happy with their job and want to make impression they're doctors or something.
Also, this is a module on adjectives, long and short. This exercise shows a way of expressing "everyone knows" using a short-form adjective.
My only question is whether this format is preferred by Russian-speakers, or whether they'd use something closer to the English "Everyone knows..."