Staff behavior is easiest to judge (patients can't see hospital notes, and if you're not faking you can't judge the diagnosis much). Here's my experience in the acute psychiatric wing of a Swedish public hospital:
I am not psychotic (as far as I know, ha) but had a symptom a few years back that I mentioned when asked. (I think they screen everyone for psychosis.) They focused on that a lot, but did not medicate me for it.
the pseudopatients were not able to obtain their release until
I was voluntarily hospitalized. I don't know if demanding to leave would have worked. I was able to get day permissions and then released basically by being visibly happy then telling doctors so.
they agreed with the psychiatrists that they were mentally ill
Nobody asked me to self-diagnose!
and began taking antipsychotic medications
That one's true - medication (not antipsychotics in my case) was not optional.
No staff member noticed that the pseudopatients were flushing their medication down the toilets
Taking meds is the only time we were actively watched (except for patients on suicide watch).
Their possessions were searched randomly, and they were sometimes observed while using the toilet.
often discussing patients at length in their presence as though they were not there, and avoiding direct interaction with patients
Some attendants were prone to verbal and physical abuse of patients when other staff were not present.
Nuh-uh.
Contact with doctors averaged 6.8 minutes per day.
30 minutes every weekday morning with two doctors and a nurse, in a private room. I think this is standard procedure in Sweden.
I haven't seen any links to this on Lesswrong yet, and I just discovered it myself. It's extremely interesting, and has a lot of implications for how the way that people perceive and think of others are largely determined by their environmental context. It's also a fairly good indict of presumably common psychiatric practices, although it's also presumably outdated by now. Maybe some of you are already familiar with it, but I thought I'd mention it and post a link for those of you who aren't.
There's probably newer research on this, but I don't have time to investigate it at the moment.
http://en.wikipedia.org/wiki/Rosenhan_experiment