VANCOUVER - A controversial private clinic that opened to great fanfare and a promise to relieve gridlock in emergency departments is now treating only injured workers and foreigners.

Dr. Mark Godley, who started the False Creek Urgent Care Centre with several investors, says his high-tech clinic is turning away patients who show up with their medical cards. That's because of a spat with the government over the clinic's demands for higher fees per patient visit.

Godley said Wednesday the government is currently paying the clinic only about $35 per patient - not enough to cover costs.

Canada's first clinic to treat urgent conditions outside a hospital had intended to charge every patient a $199 up-front fee before a showdown with the government on Dec. 2 - the day after the facility opened.

That clinic, which is attached to the False Creek Surgical Care Centre where Godley also practises, then began operating as any walk-in clinic or emergency room that bills the Health Ministry for services.

But Godley said the agreement was hatched with an understanding that the clinic would work out a higher fee structure with the Vancouver Coastal Health Authority.

"They've negotiated with us furiously but they don't seem to see any way of being able to offload the burden on their infrastructure or see a justification in directing patients from their facilities to us," he said.

Godley said he won't be subsidizing patients' treatment with higher fees.

"We're not going to just take in walk-in patients because right now being paid through the Medical Services Plan simply results in us having to subsidize the care of patients," Godley said.

"So until we have an agreement with the health authority or the Ministry of Health we simply cannot continue basically paying to treat patients."

It's not the government's business to ensure any private clinic's costs are covered, said Viviana Zanocco, spokeswoman for the Vancouver Coastal Health Authority.

"They asked for a meeting and we agreed to it," she said.

"We told them that we would be open to any arrangement or any kind of partnership opportunity provided there was a sound business case that supported the merits of a contract . . . in terms of improved patient access or quality of care or use of resources.

"Obviously it doesn't make sense for us to go into the hole to refer people to an outside care provider."

The health authority was never part of any 'furious negotiations' with Godley, nor did it agree to pay costs higher than what the Medical Services Plan already pays, Zanocco said.

"We would have been willing to probably pay a little bit more maybe than the MSP would have offered but obviously it's not enough for the shareholders of the False Creek Urgent Care Centre."

The clinic opened to a throng of reporters and strong government warning that the for-profit facility could be shut down if it violated the Canada Health Act by illegally charging for services paid for in the public system.

Godley said he's not disappointed with the turn of events at the clinic that has been touted as a unique treatment facility in Canada.

"The centre will provide care to people and we're extremely excited," he said, adding the best MRI machine in Canada will be installed by Jan. 22.

"This is an unprecedented opportunity across this country," Godley said.

"There's not a magnet of this strength to provide images of this quality anywhere in this country so I think we have got a facility that is going to be outstanding and is going to be a centre of excellence.

"We have a business plan and we knew what was coming so this is the way it is and we'll just be fine."