Psychiatric medication have come a long way since the 60s, so running wards should be alot simpler than back then with all those insane displine procedures.
In the case of mental hospitals, the closures were supposed to be replaced with community based care, but of course Medicaid and Medicare funding was not set to meet demand.
I don't have a true answer to fixing all of this, but it should definitely be said that it WAS in fact bad. And that the fixtures are not technical in nature.
Legally, yes. Unfortunately. If nothing else, it is something done in their own power, and no governmental institutions can be accused of breaking the 7th amendment over it.
There are current and forming solutions to this, but the US has always had a fickle relationship with actually voting in welfare options when push comes to shove. Crabs in a bucket; They want the homeless out of sight, out of mind, but don't want to pay taxes that goes towards "free handouts". That mentality needs to change if the US is ever going to make headway on this.