No one wants to talk about this (or at least few), but in my experience, so much is being fed from the federal government, at least in the US, that changes at that level force massive changes system-wide. Without meaning to come across as reactionary, most of US academics and its problems are being driven by money flows from the federal government to universities via grant mechanisms.
I think like a lot of major problems, it will require a lot of changes coming from a lot of places.
One massive one, though, in my opinion is serious, significant changes in grant funding processes. There need to be big changes to how grants are awarded and funding decisions are made, and how those grants are actually funded. Moving to more of a lottery-style system (where everything above, say the 50%tile are entered into a lottery), and funding individuals are examples.
I also seriously believe indirect funds need to be cut. In the very least least indirect funds need to be line-item justified, rather than being based on some arbitrary percent cut or however they're negotiated now, with independent audits of the indirect funds to determine whether universities are asking for more than they're actually cost.
Some universities get around the indirect fund incentive structures in creative ways. For example, one place I know of takes all the indirect funds and redirects it toward university-grant support services at the university, so none of it goes into other activities, and it doesn't go to specific departments. But even that seems insufficient.
A lot of this is going to require other things, like trimming administrative bloat, democratizing university decision-making, punishing superficial promotion and tenure criteria, and increasing transparency about why universities are making decisions that they are. This is just the tip of the iceberg.
I have no idea what's going to happen. Former federal agency heads have compared it to the pre-2008 financial bubble, and that's what it feels like to me. But how that bubble pops I have no idea. I could see the government coming in and cutting indirect funds; I could see something like indisputable proof of COVID being the result of a lab leak maybe causing a public outcry over what's going on; or I could see people just not going to grad school anymore and things drying up. Or maybe it will just get exponentially worse for awhile.