JOHN FAIRMAN, chief executive officer of the D.C. Health and Hospitals Public Benefit Corp., put his finger on a paradox of the city's health care system. He noted in congressional testimony that the District has an abundance of health care resources, yet more and more residents are living in near-Third World health conditions.

This misapplication of resources is high on the mayor's health care reform agenda, as it should be for the financial control board and the array of health professionals slated to examine District's health care system. Mr. Fairman notes that the District has more than twice the national average of general physicians, specialists and hospital beds. Besides three academic medical centers, the city has four community hospitals, five speciality hospitals, six trauma centers and enough capacity to more than meet the health needs in a city of this size.

Yet despite Medicaid spending exceeding the national average and, despite an abundance of doctors and hospitals, the city wards where residents have the greatest health care needs have the fewest health care resources. The absence of action on the issues of access to health care and the distribution of services guarantees a continued deterioration in the overall health of District residents.

Most of the hospitals and not-for-profit clinics are found west of the Anacostia River. However, the Southeast quadrant of the District -- east of the river -- is where the highest number of poor and medically needy residents reside. It's also where more than 40 percent of the District's total uncompensated hospital care was provided in 1997. Something is dangerously out of whack.

D.C. General Hospital absorbs 37 percent of the total uncompensated care bill. It is the District's largest provider, going away, of uncompensated hospital care. But it receives city appropriations to cover only one-third of the cost of care at the hospital. Other city hospitals tell much the same story. The saga worsens when issues such as reduced hospital reimbursements of Medicare and Medicaid payments are taken into account. The red ink swamping Georgetown University Medical Center ($38 million in the first half of this fiscal year, $62.4 million in losses last year) is the latest indication of the strains on the system.

Nothing short of a fundamental reshaping of the city's health care system will do. The mayor is right to take the lead.