I think we're doomed on this issue so long as the prevailing sentiment is that every schmuck in the world is continuously entitled to the absolute best treatment medical technology has to offer. Every new treatment, machine or drug is a new liability on the system. It would be like saying that everyone is owed the largest, highest resolution TV money can buy, updated every 6 months.
People weren't exactly in 3rd world conditions in 1985, but at this point, that level of care is totally unacceptable. Everyone on the public dole needs all the new treatments even if they cost $1 million more for a tiny fraction increase in survival rate.
Under free markets, not only would people, on average, be better off, but almost every single person would be better off due to the pace of innovation. At the same time, some micro fraction of people would be left out, and the very rich could have treatments that others could not. Many people find this unacceptable and would rather destroy the whole system to prevent it.
I'm not too down on the other Republicans on this actually. Mitt, from what I understand, has a "plan" that Cato was happy with, which is relevant to me. Even Rudy talks of breaking insurance from employment, which could go a long way to improving things. Maybe Ron should be more like a politician on this and release a specific N-part plan.