Unfortunately, the situation is much worse than this article depicts. Many of the problems we see today began when we stopped treating patients on an inpatient basis long-term. The government requires that people be able to "participate in the life of their community." This is what happens when the community does not want the mentally ill and there is no refuge for them. I agree that patients should not be tucked away and forgotten, but they shouldn't be thrown onto the streets and expected to bootstrap their way to mental health.
I am a clinician working in an inpatient facility. We are focused on crisis stabilization, and we are good at what we do; I see a tremendous improvement in most of my patients. But the fact remains that there are very few placement options for them; institutionalization has not been replaced with independent living, but with 'personal care homes', which are often unlicensed and sometimes provide deplorable conditions for patients. For the price of a patient's disability check, they usually get no better than a few meals a day (Vienna sausages, baked beans, or a sandwich) and boarding in a home that is falling in on itself or is housing more residents than it can reasonably hold. There is very little supervision, and little to no therapeutic care. Unless the chronically mentally ill live in an environment that supports medication compliance, quality of life and hospital admission rates will continue to worsen. Even when people are ready for help (which is a hard place to come to for many), the resourcefulness and tenacity you need to acquire services is mind-boggling.
We have to have other options besides standard outpatient counseling/psych care, intensive outpatient programs, and acute inpatient facilities. Assertive Community Treatment and other efforts are improving outcomes in locales across the country, but we need systemic reform to mental healthcare and healthcare parity. If people worked on the inside like I do, they'd know how much money we're wasting with poor policy and how burdened existing inpatient facilities are with the result of poor outpatient programming.