Institutionalization can happen to a person with mental illness with or without their housing as one of its components. Many persons with mental illness are forced by economic concerns to live in a "board and care home" (which is a privately owned house that rents to mentally ill people) or in "supported housing," (this might be an apartment complex that has low rent, set aside for persons with disabilities.)
Living situations like the above may not provide a lot of dignity. A resident may have to put up with being supervised, with being restricted, sometimes with being harassed, or just with having a street address that has negative connotations.
(I wonder if it is harder to be hired at a job when the address given on the application is that of a known mental health housing project. And then, without being able to get hired at a job, how is a person supposed to climb the economic ladder and some day move out of such a facility?)
Institutionalization to me is one of the major factors that make life with mental illness un-fun. On an outpatient basis, it can consist of participation in a day treatment program, as well as visits to a clinical psychologist, visits to a psychiatrist for medications, and of course, trips to the pharmacy. I am including trips to the pharmacy because it is one more complication in life that we must deal with, and because the pharmacist apparently plays a part in monitoring persons with mental illness.
Ultimately, in nearly all aspects of our lives, we are reminded of not being normal. Many persons with mental illness are resentful that they have been classified as abnormal and incapable. To be treated as though we can not think or function normally, in all venues that we normally go to, will either make someone outrageously mad, as well as motivated to do better so that they will not be in that situation, or else, it will convince a person of their own worthlessness, and they will consent to being a controlled zombie for the rest of their life.
Many persons with mental illness crave to be in a situation in which they are not treated and viewed as an "ill" person. A day of work for a temp agency may temporarily provide this. I am suggesting a temp agency since most persons with a major mental illness have difficulty sustaining regular full-time work; part-time and temp are more doable. A person could go to a temp agency and work one or two small assignments, and can then consider that they are successful at that.
Institutionalization can affect a person's self image to the extent that they become identifiable in public, because they have learned to carry an aura of being abnormal and less of a person.
The above paragraphs express my somewhat skewed image of the mental health treatment system. However, if I think about it, I realize that there are some persons with mental illness who truly need the help. In that case, these institutions are there for them and provide needed care.
The above text conveys two perspectives concerning the psychiatric outpatient care system. Which side a person is on may depend on his or her anger level, as well as the readiness or lack of readiness to blend in with people at large. For some, anger is channeled into positive actions toward getting oneself into a better situation. In this case, resentment could be a sign of health.