THE REAL PROBLEM....What Ezra says. Medicare isn't the problem. Healthcare is the problem. If we don't figure out a way to contain the overall rise of medical spending, it really doesn't matter much exactly how those dollars get spent.
Needless to say, I think the only serious opportunity to rein in those costs without a revolt of the middle class comes from a universal system regulated by the feds. The liberal argument for this is that it provides decent healthcare to everyone and allows greater freedom of choice for consumers. The conservative argument is that it makes medical costs more transparent. Right now, consumers have essentially no say in the cost of health insurance. They just pay whatever their employer makes them pay and then use as much medical care as they want. A national system, however, is limited by how much people are willing to pay in taxes. That provides a stronger motivation for cost control than anything we have now.