Hospitals were closed with the release of new drugs that promised to treat mental illnesses. They didn’t deliver, but the hospitals were closed anyway.
Reagan was elected as a conservative backlash to Carter's progressive policies. We're talking about someone so petty he ripped functioning solar panels off the roof of the White House.
...and the fact people were horribly abused, it became widely published, and public outcry was a big factor in closing the "hospitals" that didn't treat their patients.