Are psychiatric hospitals really effective, do nothing much, or do more damage?

Effective. Psychiatric hospitalization is mostly used when a patient poses a danger to him/herself or presents with a situation that requires a higher level of care than that available in an out patient setting. Sometimes peculiar patient problems may be the reason for hospitalization.
Psych Hosp. They are effective for acute stabilization in general they should be avoided if less restrictive measures can help.