20 provide additional revenues to be devoted to public health programs. A rough calculation of such potential is obtained from revenue buoyancy estimates. The point estimates of revenues from nontax, tax, and tobacco tax with respect to local government GDP exceed unity; and a 10 percent tobacco taxes tend to reduce cigarette consumption by 6 percent; reflecting that this levy is very buoyant revenue instrument and consumption deterrent. Other legislation and/or restrictions should targeted to reducing the risks of disability or death from injury, which will steal 16 percent of total DALY lost in 2020, up from the 10 percent figure in 1993. Transport accidents in particular should be targeted, since they account for more than a half of total DALY lost due to injury. Government transportation policy should seek to improve traffic safety by upgrading road design, traffic signals, and speed limits, and to modify drivers' behavior particularly with the imposition of higher fines for drunk drivers. Although studies on alcohol-related motor vehicle accidents and deaths in China are unavailable the U.S studies should alert the decision- makers of China.s _Reforming Urban Health Insurance._ The urban health insurance schemes i.e GIS and LIS are providing inadequate coverage and face rising costs. Because, schemes cover only the employment-based population, capturing only 14 percent of the total population of China. Their costs are escalating in real terms due to growing number of claims, and they promise to rise in the future, as the population ages and the number of claims for curative care increases (Annex Table 7). "Moral hazard" factors also escalate costs, since they create incentives for health providers to offer more care than patients actually need and to overprescribe medication and tests. These profit earning opportunities may lead to an overconsumption of newly developed and expensive technologies as a substitute for less expensive diagnostic tests and surgical procedures. To enhance coverage and contain costs, the government should pursue four options: centralize the management of health insurance, extend GIS and LIS coverage, and redesign benefit packages including prepayment system.

Centralized management would create larger risk pools and provide administrative economies of scale, and capture employees who risk losing coverage as their SOEs face bankruptcy or merger under the SOE reform. A combined pool would also give local governments greater bargaining power for negotiating contracts on capitation payments. But implementation will require vigorous inter-agency coordination because comparatively young LIS beneficiaries would naturally oppose pooling their risks with their comparatively old GIS counterparts. In this respect, it is worth highlighting the experience of Jiujiang and Zhenjiang cities, which have combined the GIS and LIS systems in order to smooth the cost of health services over time by distributing it equally across the beneficiaries.

Coverage under the GIS and LIS could be broadened, first by including the dependents of beneficiaries and then by covering all labor in the formal and informal sectors. But the experience of Shenzhen health insurance scheme suggests that private and joint venture companies will not readily participate in this social health insurance scheme. Here, an alternative policy option would be to make hospitals liable for all overspending on the capitation payments (introduced in 1991), forcing them to invest and create trust funds with profits and unused capitation money. This option would gradually elimninate the 50 percent government contribution to such over-spending. The freeup resources would give additional leverage for financing the essential package for the uninsured.

> _5_ In the U.S, more than 50 percent of all motor vehicle related deaths are alcohol-related. See for example, Anon 1990" Alcohol-related Traffic Fatalities: United States 1982-89" _Morbidity and Mortality Weekly_ Report 39.