David Rosenhan, a psychologist at Stanford University, published the results of the experiment in a 1973 issue of the journal Science. "On Being Sane in Insane Places" would become one of the most influential studies in the history of psychiatry.
It was a secret experiment. There was a graduate student, a housewife, a painter, a pediatrician, a psychiatrist and three psychologists. Using fake names, they went out to 12 hospitals across the country and claimed to hear voices. Their mission was to see what would happen.
According to Rosenhan, each of the "pseudopatients" told hospital staff about hearing voices that used the words "empty," "hollow" and "thud." The pseudopatients claimed the voices were difficult to understand but sounded as if they came from the same sex as that of the fake patients. Other than making claims about voices and giving themselves phony names and false occupations, the pseudopatients — Rosenhan among them — made up nothing else. None of them had any significant history of mental illness.
All of them were admitted to psychiatric units, at which point they stopped reporting any psychiatric symptoms. Still, nearly every person in the experiment was diagnosed with schizophrenia. Their hospitalizations ranged from seven to 52 days. Doctors prescribed them more than 2,000 pills, including antipsychotics and antidepressants, which the pseudopatients largely discarded.
Although none of the pseudopatients were unmasked by hospital staff, other patients on the psychiatric units became suspicious of them. Across several of these hospitalizations, 35 patients expressed doubts that the pseudopatients were actually mentally ill, according to the study.
After much debate and controversy, Rosenhan ran a follow-up experiment.
For this experiment, Rosenhan used a well-known research and teaching hospital, whose staff had heard of the results of the initial study but claimed that similar errors could not be made at their institution. Rosenhan arranged with them that during a three-month period, one or more pseudopatients would attempt to gain admission and the staff would rate every incoming patient as to the likelihood they were an impostor.
Out of 193 patients, 41 were considered to be impostors and a further 42 were considered suspect. In reality, Rosenhan had sent no pseudopatients; all patients suspected as impostors by the hospital staff were ordinary patients. This led to a conclusion that "any diagnostic process that lends itself too readily to massive errors of this sort cannot be a very reliable one."
You have to remember that this is from the 70s. There has been much research done around this set of experiments and major laws have been put in place throughout the world.
The story above is often told in psych 101 classes in order to demonstrate the imperfections in a constantly evolving health field.
Generally, people can now only be held against their will if they pose an immediate threat to themselves or others. The hold times are also not indefinite.