There have only been 3 psychiatric hospitals that I have been to in my life that I view as at least somewhat beneficial. Two were in Atlanta, Georgia area (Ridgeview in Smyrna and Peachford) and one in Nashville, Tennessee (Skyline). This was because they kept the patients busy with therapy programming all day with a proactive therapy approach.
The rest (all in Tennessee) have been mostly crap, and I wouldn't doubt they are money schemes. While there is no abuse or draconian practices, they are just temporary nursing homes with enhanced safety features and supervision. There is very little programming, little access to a therapist, minimal communication, and all they do is heavily medicate you, feed you, and watch you as you color on coloring sheets and watch TV. There is very little to no aftercare arrangements, leaving these places as revolving doors.
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A psychiatric hospital is a last resort. It is not a vacation home. You only go there if you’re on the brink of ending your life or endangering others. It is not their responsibility to set up aftercare once you leave, their only responsibility is to keep you alive and meet your basic needs while you’re under their care, which often includes medication to keep you regulated. Aftercare is your responsibility to set up with an outside therapist, counsellor or psychiatrist.
To an extent, I agree, however, if you are entering into a facility like this, you have hit rock bottom. You are likely a danger to yourself or others or dysfunctional to the point you are a risk. There should be a very proactive approach to prevent reentry into a situation like this, including guaranteed access to therapists upon request while at the facility and proactive approaches to help a patient to not only be stabilized to a bare minimum to return home, but to also help them understand their mental illness and identify coping mechanisms as a line of defense to help prevent themselves from reaching that situation again. These facilities are not cheap, neither to the patient themselves and the taxpayers. In addition, you don't want these places to be revolving doors, or worse, a patient committing an offense and ending up in the correctional system where they will be treated worse.
A psych hospital is definitely not a substitute for outpatient aftercare, but you would hope more would be addressed in the limited amount of time in their care. Medication alone may work for some individuals, but for many a combination of psychotherapy and medications will have better results.