I've worked in long-term, short-term, forensic units, private practice, community practice, ER, etc.
There definitely is a need for long-term facilities. Some people are treatment-resistant. That said, a long-term facility should be a last choice option or an earlier choice option if the case is readily apparent as severe (e.g. extremely violent while psychotic or manic).
Usually there's a long-term facility that services quite a sizable chunk of the state. Some states only have one. It's understandable given that few people per thousand need this level of care.
Such patients that need a long-term could be clozapine-resistant, or need clozapine, taking months to reach a therapeutic dosage. Some people are late-responders-taking weeks before the antipsychotic works. Others could be very severe in their level of violence. Others could be tricky cause it could be a TBI, in which case a med-trial of several meds may be needed that could take over a year before one is found that is optimal for the patient.
Now all of this said, doctors in long-term facilities tend to suck. This is not true of all of them. But since you don't have to write a daily note, they are virtually all state-funded and thus fall into the usual -you don't get paid more for better work- mentality, a lot of the docs working there aren't good docs and can get away with it. I had several cases where a patient was psychotic on one guy's unit for over a year, he was only on Risperdal 1 mg daily and transferred to my unit and I got the guy better in about 10 days upping the Risperdal to 4 mg Q BID and the guy and his family are asking "why didn't the other doctor do that?"
(Of course some of the docs working there were very good. The ratio of good to bad was about 1 to 3.5, at U. of Cincinnati the ratio was about 8 out of 10 were excellent with some of them being literally the nation's best, in private practice it was about 50%).
To reward my superior performance, the clinical director saw to it that I got all the tougher patients and I didn't get paid anymore than the guys doing piss-poor work, thus making my unit more dangerous for my treatment team. This is the type of BS you got to deal with if you work in a state facility. I don't claim to be a genius. I only claim to do competent work but I was surrounded by very incompetent people so I stood out.
I did eventually barter with the administration, telling them I always want tough patients but to cap it because I'd get burned out, but also for safety reasons. I always wanted at least 3 really tough cases. Compare that to most of the other docs that didn't want one tough case. Once I got one of them figured out and fixed, transfer them to a BS doc and give me one of the BS doc's bad patients that he did not get better.
The enjoyable aspect of working in the long-term facility for me was that you could get really tough cases, and like a House episode, get your skills truly tested. Another aspect is a long-term facility is purely psychiatry as the main focus, so that BS attitude from other disciplines we psychiatrists sometimes get? Well in a long-term we are the masters. The other disciplines work with us and we're in charge.
For students and residents, long-term facilities are where you'll likely master Clozapine treatment since on most units there'll usually be quite a few patients on Clozapine and you can see for yourself a patient tried on say 6 antipsychotics, none of them working and then Clozapine's tried and voila the guy gets better.
After I left the state to become a professor, the state hospital offered me back as a clinical doctor with a $30K raise that they would not offer to other docs that had to be approved by the state government, so at least they were going to recognize I was doing better work and give me some payback for it. I was also offered the #2 position in the hospital for even more if I wanted, and the new head of the hospital was a very good highly respected doc that I wanted to partner with. So I was in a conflicted position of staying at U of Cincinnati with some of the top people that I highly respected, or going back to the state but running a hospital with a clear path to be the head guy in maybe 10 years. (Most of you know I ended up moving to St. Louis cause my wife got a professor's position-so that solved that dilemma of having to choose).
Another nice thing about the state is that job marries very well with private practice. You get all the benefits of a full-time job usually only at 20 hours a week, and could spend the rest of your time doing private practice.
