This already happens with homeless people: they become diseased, malnourished, get drunk and hurt themselves. Once the trauma has reached a certain degree that they require hospitalisation, they end up in hospital and released once they've recovered. Are you proposing we not help them at all and just let them fester and die on the streets?
Surely not. The "revolving door" concept, as you call it, is the middle-ground between not helping at all, thus letting a mentally ill person reach trauma more severe, and permanently confining those with incurable mental disorders (but those which can be controlled, and the patient able to live healthily outside the ward), which is both wildly expensive and harder to justify overruling the patient's will and freedom.
Surely not. The "revolving door" concept, as you call it, is the middle-ground between not helping at all, thus letting a mentally ill person reach trauma more severe, and permanently confining those with incurable mental disorders (but those which can be controlled, and the patient able to live healthily outside the ward), which is both wildly expensive and harder to justify overruling the patient's will and freedom.