Madhouse (2004)

Craig arrives at an asylum to start his internship and immediately alienates Dr. Franks before even starting his job, when he questions the patients treatments and hands in a list of changes that would be beneficial to their recovery.  Dr. Franks is not amused and tells him to shut the hell up and do his job.

Craig has a hard time distinguishing the staff from the patients, which isn't surprising since besides the evil head nurse, the only person who appears wearing a white doctors coat is a patient who thinks he's a doctor.  Here's an idea - maybe the crazy people shouldn't be allowed to wear white doctors coats?   Other staff members dress inappropriately, including his new friend Sara who wears shirts you'd wear on a date rather than to work.

Shortly after settling down in his apartment on the grounds, Craig sees a small boy in his room.  The boy disappears. But he sees him again in the hospital hallways at night. Craig runs after the boy, but can't find him.  He hears rumors of ghosts, and strange things start to occur.  But he doesn't put the sighting of the boy together with this information.

Craig starts having long talks with a mysterious patient in one of the basement cells, where the most dangerous, insane offenders are housed. In an attempt to find out who the boy is and why strange things are happening, he talks to all the patients.  He questions them as if they're normal sane adults. It's  sweet of him to be so sincere, but good god man, they are insane!  You can't believe everything they say and you really shouldn't be taking their word as valid research.

Soon patients are dying, staff are getting murdered, and Craig uncovers something odd about the medication the patients are given.  There's a twist ending which you'll probably figure out in advance, although I must admit I only figured out one of the two parts of it.