Each board of managers shall have power, in case of the existence of any contagious or infectious disease, to establish such quarantine regulations as they may deem necessary and may provide for the isolation of inmates suffering from such disease, either within or without the institution in an isolation camp, or in a hospital for the care and treatment of such diseases, with power either to pay the expenses of establishing and maintaining the quarantine and isolation camp, or to pay for the board and treatment of the inmates in a regularly established hospital. The custody of all inmates in any hospital or quarantine camp shall remain in the chief executive officer of the institution of which such persons are inmates. No inmate shall be placed in any hospital outside the limits of the institution without the approval of the commissioner first had and obtained.