Colony Club: last residents at historic leprosarium face uncertain future. (Travel Intelligence).

In 1944, a doctor scraped a small piece of skin from 12-year-old Ruth Thompson's elbow. Test results revealed the child, from Almirante, Panama, had Hansen's disease, the dreaded illness also known as leprosy.

Like hundreds of other Panamanians in the first half of the 20th century. Thompson's future was now set in stone. She was forced to move--by herself--to the leprosarium at Palo Seco in the Panama Canal Zone. "I didn't even know what leprosy was," she recalls. "When I came here, I was the only child. I lived with a lady named Segunda Guevara, who took care of me until I was 15 years old."

Today, Palo Seco sits more than half empty Statues of saints stare at empty pews in the dusty chapel. Only eight Hansen's disease patients remain, joined by a handful of Alzheimers patients and physically disabled youth abandoned at hospitals by their parents. But how much longer they will call this quadrangle of wooden dormitories home is anyone's guess. Set on 340 acres of lush Pacific beachfront, the property is more valuable as real estate than as a healthcare facility And Panama is in the midst of a big tourism development push.

When the U.S. government opened Palo Seco in 1907, it had lots of experience isolating patients. Following a worldwide leprosy scare in the 1890s, it was operating similar compounds in Puerto Rico, Louisiana, Hawaii and the Philippines.

At Palo Seco, health officials went to great lengths to minimize patients' contact with the outside world. Mail was sterilized with a hot iron before it left the settlement. Special currency, created by the Philadelphia mint, was used between 1919 and 1952 to keep money touched by Hansen's disease sufferers out of the hands of the uninfected.

Most precautions were unnecessary. Fear of the disease has always been greater than the danger of contagion.

As many as 150 patients lived at one time at Palo Seco. By 1952, some 40 patients worked for the colony as orderlies, waiters, carpenters and maintenance men. Others raised chickens, hunted, fished or grew fruits and vegetables, selling their harvest to the commissary. One patient served as Palo Seco's booking agent, bringing celebrity performers to entertain the patients.

As an adult, Thompson ran the government-subsidized grocery store, where residents bought aftershave, soap, shoe polish, toothpaste, cigarettes, soft drinks and even beer. In 1957, she married patient Ricardo Thompson and had five children--each sent away by the government to be raised by relatives--before the couple divorced in 1964.

Just more than two decades ago, the U.S. government transferred Palo Seco to the Panamanian Ministry of Health. "The food has gotten worse," complains 84-year-old Luis Godoy, who has lived at Palo Seco for more than a half-century. He sits at a long table in the screened-in cafeteria, the breeze offering little relief from the heat, while Rosa--a fellow patient and his wife since 1956--nods in agreement. "When the North Americans were here, the food was very good," he says. "Now, the cuisine is comida criolla, but extremely bad."

For her part, Thompson preferred the sprawling leprosarium at the U.S. Public Health Service Hospital in Carville, Louisiana, where she went for a series of operations in 1983. "I was there for five years and four months," she says of the former plantation. "There were 300 patients from all over the world. They had air conditioning and hot water in every room. I didn't want to leave."

In Palo Seco's administration building, Dr. Ilka Viejo Henri leans back in her chair, the Pacific Ocean a surreal haze beyond the wide, screened office windows. Viejo Henri, the facility's medical director, says the main reason Palo Seco doesn't stack up to its U.S. counterpart is the Panamanian facility's shrinking budget. "It used to be half a million dollars. Now it's just US$285,000 per year," she says. "That's not enough. Unfortunately, if you're not in the newspapers, you don't receive a lot of donations."

Other leprosaria, including Carville, Hawaii's Kalaupapa on the island of Molokai and Peru's San Pablo, nab extra income as tourist attractions. Kalaupapa, for example, is close to becoming a national historic park. In the interim, patients conduct tours. But Palo Seco has no museum, no gift shop and no visitors.

"In spite of the fact that we've tried to educate the public, when they hear the word lepra, people are still afraid," the doctor says. "In other hospitals, they have volunteers. We still haven't gotten any." The government has declined to give Viejo Henri long-term assurances about the facility.

Rumors about Palo Seco's closure--and the value of its waterfront real estate--have circulated for decades but developers say they carry far more weight today "For the moment, there are no definite plans for any type of projects in this area," says Ramon Vallarino, international development officer at the Panamanian Tourism Institute. But the patients are resigned that they may have to leave their only real home soon. "We are waiting," says Rosa Godoy.