We need to rethink the way community-based mental health services are rendered. No one should be calling for a return to the model of institutionalization that the US followed from the mid-1800s to the 1970s. But a purely outpatient model leaves way too many people slipping through the cracks. I don't think people fully understand the connection between the mass closure of mental hospitals in the '70s and '80s and the rise in homelessness that followed.
Institutionalization is absolutely the way to go. That doesn't mean the system should be the way it was back then. But the proper path was never abolition of mental health institutions. It was reform of the way institutions operated internally: greater oversight to reduce abuse. These people often (especially in the case of the really violent ones like Michael) just cannot be trusted to make their own decisions on whether and when they leave a mental health facility. Involuntary commitment is the only way.
Instead, we took the easy path and just foisted mental health patients on their parents and the streets because government wasn't interested in being part of the solution.