Jackie Baillie said Mr Yousaf’s lack of self-awareness “might be considered by clinicians to be delusional”.
Mr Yousaf is widely expected to enter the race to be the next leader of the SNP following the shock resignation of Nicola Sturgeon on Wednesday.
A friend told The Daily Record: “Humza is veering that way. He has a lot of support from MPs and MSPs. Some big names.”
They said the health secretary would be a “unifying force”, adding: “Just as he has managed to get health unions round the table, he would bring the party together.”
Ms Baillie laid into Mr Yousaf during her speech to the Scottish Labour Party conference, which is taking place in Edinburgh.
Ms Baillie, her party’s health spokeswoman, told activists he was “without a doubt the worst minister I have ever had the misfortune of shadowing”.
She added: “But conference, I hear the most astonishing news. Having been the worst health secretary on record, his condition has deteriorated further.
"He now aspires to be the worst first minister on record. The lack of self-awareness might be considered by clinicians to be delusional.”
Elsewhere, Ms Baillie said Labour would cut the number of territorial health boards in Scotland from 14 to just three, while merging the eight special boards.
She said the cost of the current “bureaucracy” is more than £20 million, and this could pay for more than 700 nurses.
"The people of Scotland don’t care where the health board headquarters is based,” she said. “But they do care about being able to access their GP close to home and specialist services at their local hospital.”