They are ending up in places that absolutely not equipped to help them in any meaningful way. Mental hospitals won't fix everything, there are a lot of things that aren't "fixable", but they would at least be better equipped to handle the problems of these people.
I view institutions as providing a number of "services"
1. Provide the basic necessities of life to those too disabled to provide it for themselves.
2. Centralize care giving to increase efficiency. You can have all the specialists in the same facility, available to assist as necessary.
3. While they're probably going to be as expensive as a prison, they're likely to be cheaper than jail*, much less emergency rooms.
4. Protect society from those with those types of issues.
5. Protect themselves from other types of issues.
From what I've read, the real horror stories of the original asylums were really restricted to just a few of them, combined with that in many cases, their inability to treat many of the patients effectively was a horror in and of itself. Not the fault of the staff or facility, but a matter of limited technology. There was simply no way that it wasn't going to be a horror of varying visibility.
So, while it's not going to be pretty, properly funded asylums today could often be like halfway houses, and while not horror free even today, the least bad of a number of bad choices.
*Jail is actually more expensive, on average, than prison, on a per inmate-day basis.
His point is that most of the people in a mental health place are not violent but they are occasionally disruptive. So there is no need for these max-security dungeons. You can and should have a pleasant place for these folks to live. And someone up thread mentioned that some of them were not what is found in the popular imagination.
Indeed. If you look at some of the old imagery that was taken
before the asylums were shut down and abandoned, many were very beautiful facilities. They looked very different in proper lighting before the art was stripped out, people vandalized and graffitied them up, the roof collapsed, etc...