Earlier quoted context omitted.
No, the closure of mental institutions occurred during the Reagan administration because he cut funding for treating mental illness from his budget. In CA, when he was governor, Reagan ordered the closure of many facilities.
No, there was a society-wide push to close institutions. Reagan might make for a nice whipping boy, but putting it all on him is just silly.
Reagan than decimated the mental health department in CA below sustainable levels, and followed that up by ending federal funding of mental health treatment only a few years after trying to make the federal government pay for it when he was governor. As most state budgets no longer covered mental health, the result was an enormous drop in government spending on mental health.
And yes, it's all directly traceable to Reagan.