DFWTraveler5, the current bill doesn't cut "half" of Medicare's funding. It's a very small percent that is supposed to be made up by increasing effeciency and cutting provider reimbursements. The 2010 Budget request for Medicare is $823 billion.
http://www.cms.hhs.gov/PerformanceBu.../CMSFY11CJ.pdf
The Senate bill was to cut $500 billion out of Medicare over ten years. If those cuts were spread out equally -- and yes, I know that they are not -- it's around a 6% cut. In fact, the cuts in up front years are less, in out years, a bit more. But let's put this in perspective, at no time do the cuts approach your figure of "half."
And as for incremental change, it won't work. The CBO has estimated that gutting the malpractice system will save, at most 1% of health care premiums. And it's not really a savings, as the costs of the malpractice epidemic are still fully borne by those who are malpractices. The real solution isn't to eliminate or cut back on compensation, but to cut back on the actual malpractice. A recent medical study showed that there were 98,000 preventable medical deaths a year in the U.S. That's deaths only, not injuries. That's an epidemic of malpractice. That's like two 737s crashing every day throughout the year and the airline industry asking for immunity rather than being held accountable!! Does that sound like a good idea to you?