FROM THE NEWS REPORTS, one gathers that Secretary Califano's speech in San Francisco Sunday to the American Medical Association was not terribly well received. But then why would it have been? The man who runs the Department of Health, Education and Welfare was unusually blunt about the health-care business. He called it, among other things, "very costly . . . virtually noncompetitive . . . obese," and he urged the doctors to get busy reforming it before someone else does.

It's hardly surprising that the doctors did not take kindly to that kind of language. They don't go to conventions to hear their profession kicked around. But that does not change the fundamental truth of much of what Mr. Califano said. It may well be true, as the AMA's executive vice president said in response, that Americans are getting more health care in better facilities than citizens of any other nation in the world. But they are getting it at price that is beginning to become intolerable.

Outright fraud - of the kind HEW and the Department of Justice are attacking in the Medicare and Medicaid programs in California - is only a small part of that price. More of it comes from excess hospital capacity, unnecessary but expensive new equipment, unneeded tests and surgery and a general attitude among some practitioners that anything goes now that most medical bills are paid by insurance companies.

Instead of fighting with government, organized medicine ought to be working with it to get some aspects of health-care inflation under control. The one thing that has become crystal clear in the last decade is that doctors and hospitals are not going to do on their own the things that must be done to get the costs and quality of medical care under control. Some, but not enough, of them are trying. Others are profiteering at the expense of all of us. Given the commitment of this country to providing at least a decent standard of medical care for all of its citizens, the government has no choice but to urge or, if necessary, to force the changes that the health-care business sorely needs. We take that to be the point of Secretary Califano's speech. The AMA would do more for its members in the long run by taking an active and constructive part in a reform effort than by pretending that things are just fine the way they are.