Yes -- the closing of mental hospitals was very much in response to a moral panic (possibly justified) against the unreasonable use of involuntary indefinite confinement. That combined with the inhumane conditions in the facilities themselves, which was itself worsened by the difficulty in obtaining funding and overcrowding.
In the US this is very much an unsolved problem -- chronic homelessness is probably a problem better served by indefinite involuntary confinement, but the moral cost of this is very high and there's a lot of reluctance to go back to that. In Europe this is less the case -- if you look closely into any country that has made big strides fighting chronic homelessness (I'm looking at you, Finland [1]) underneath it you'll see a huge rise in the involuntary confinement numbers that are the quiet solution.
Not just the moral cost. The monetary cost is quite high too. Easy decision to save money by cutting something that most see as immoral, consequences be damned.
In the US this is very much an unsolved problem -- chronic homelessness is probably a problem better served by indefinite involuntary confinement, but the moral cost of this is very high and there's a lot of reluctance to go back to that. In Europe this is less the case -- if you look closely into any country that has made big strides fighting chronic homelessness (I'm looking at you, Finland [1]) underneath it you'll see a huge rise in the involuntary confinement numbers that are the quiet solution.
[1] https://news.ycombinator.com/item?id=43280456