An Ambulance Corps was formed in July 1881 for the disinfection of infected premises, the removal of patients from infected houses, the making of coffins, and the burying of those dead of the disease. The members of the Corps were at first housed in tents on ground belonging to the police force at Botany, but with the opening of the Coast Hospital were shifted to special quarters in the grounds adjacent to the hospital buildings.

The newly formed Board of Health appointed special constables to guard quarantined houses and arrange for the provision of food, new clothing, furniture and bedding to householders during the period of quarantine and disinfection of their premises, services in which the Ambulance Corps was also of great assistance.

To deal with the emergency as quickly as possible, the first construction work carried out on this land grant was the enclosing within another galvanized iron fence of eight acres of land on the western side of the bay, and the erection in the area of two groups of bell tents “on the summit of a bold hill” near the beach, the groups of tents being separated from each other by a dividing cross fence.

To this isolated settlement, the forerunner of the present Prince Henry Hospital, contacts of smallpox were admitted, until the galvanized iron pavilions of the “Sanatorium” to house contacts of infected families and the Coast Hospital itself could be completed.

Admissions to the tents started early in September 1881, during boisterous wet weather which added generally to the difficulties.

This temporary establishment known as the “Sanitary Camp”, was placed under the charge of Constable Houlahan and was visited three times a week by a member of the Government medical staff, the Executive Member also paying frequent visits of inspection.

Owing to the weather, the exposed position of the camp, and the nature of the accommodation, management was far from easy; however, Constable Houlahan proved to be the essence of kindness and tact and the venture was officially successful.

This epidemic of smallpox raged until 19th February 1882, and during those nine months 154 cases were officially notified, a quarter of whom died. Of the forty fatal cases, thirty had never been vaccinated. There was little doubt that the total number of cases exceeded 154, as notification of smallpox only became compulsory in December 1881. There may also have been some concealment by medical men, as the first two doctors who notified cases were quarantined against their will for several months!

The construction of the hospital itself was carried out with all haste, with 250 workmen employed day and night on the buildings. Dr. J. A. Beattie was transferred from the Quarantine Station and appointed Resident Medical Superintendent, and the establishment while still uncompleted was handed over to the Executive Member of the Board of Health.

The Lady Superintendent (matron) Mrs Mary Meyler, and most of the nurses were drawn from the staff of Sydney Infirmary. The Lady Superintendent of Sydney Infirmary at the time was Miss Lucy Osburn, a capable trainee of Miss Nightingale, who had sent her from England with five other Nightingale nurses at the request of the New South Wales Government, to take charge of the nursing staff of that hospital. This was the start of modern nursing training and high nursing standards in Australia.

When the construction of the Coast Hospital was completed, the establishment comprised the following buildings of wood and corrugated iron:

• six pavilion wards,
• two private pavilion wards,
• specially isolated pavilion wards,
• quarters for medical and nursing staff and
• various other necessary buildings.

The accommodation in this section totalled 106 beds.

The water supply for this main section of the hospital was obtained from the stream which entered Little Bay to the western side of the area and across which a dam wall was built.

In addition to the hospital accommodation, the Sanatorium for housing contacts of infected families was in a section known as the “Healthy Ground”. It consisted of eleven acres fenced off from the rest of the hospital, and was conducted as an entirely separate unit. Here there were five pavilions containing a total of forty-two beds and the necessary service buildings. The greatest number housed here at any time was sixty-two. Any inmates of the Sanatorium who became ill were isolated in one of two large tents erected at a safe distance to windward of the Sanatorium buildings. The other tent was a consulting room for the Medical Superintendent.

The bodies of those who died in the hospital were conveyed in an open hearse to the cemetery, where the burial service was read by the Medical Superintendent, and each grave was marked by a headstone, engraved with name, age and date.

A shed at the south-eastern corner of this area adjoining the main road to the hospital, acted as the main hospital store. The water supply of this section was obtained by means of a windmill pump which raised water from the northern stream in the north-eastern corner of the ground into tanks from which it was distributed to the laundries and wards.

Fifty-two people with smallpox were removed to the Sanitary Camp at Little Bay during the epidemic, and 187 were later isolated in the wooden buildings of the Sanatorium, which was in a much less exposed situation. During the whole of this time the hospital staff were under voluntary quarantine.