Don't Look in the Basement

The film is set in Stephens Sanitarium, a secluded rural mental health institute whose chief doctor believes that the best way to deal with insanity is to allow the patients to freely act out their realities in the hopes that they will snap out of it, so to speak. The film begins with an elderly nurse in Stephens Sanitorium making her rounds. After a troubling incident in which a patient threatens her life, she decides to retire, and goes out to visit the chief doctor, Dr. Stephens, to inform him of the decision. Unfortunately, in the process of therapy (which involves chopping wood with an axe), the crazed former magistrate known as Judge (Gene Ross) accidentally lands the axe in Dr. Stephens' back, apparently killing him. The shaken nurse returns inside to finish packing, where she is attacked by Harriet (Camilla Carr), a patient who accuses her of stealing her "baby" (actually a plastic doll). The patient kills her by crushing her head in the nurse's suitcase.
The only remaining doctor appears to be Dr. Geraldine Masters (Anne MacAdams), who is greeted by Charlotte Beale (Rosie Holotik), a pretty young nurse who informs Dr. Masters that Dr. Stephens had hired her a week ago. Dr. Masters begrudgingly allows her to settle in. The young nurse meets the patients, including a lobotomized and childish man named Sam (Bill McGhee) who enjoys popsicles and his plastic toy boat, a nymphomaniac and schizophrenic named Allyson (Betty Chandler), an emotionally dependent woman named Jennifer (Harryette Warren), an octogenarian woman named Mrs. Callingham (Rhea MacAdams) who spouts bizarre poetry and mistakes flowers in the garden to be her own children, a juvenile prankster named Danny (Jessie Kirby), a shellshocked Sergeant (Hugh Feagin) who lost his mind after accidentally killing his men in Vietnam, and the crazed judge who seems incapable of speaking in anything other than courtroom jargon and the repeated phrase "My name... is... Oliver... W... Cameron..."
Dr. Masters becomes disturbed when a telephone man comes to investigate the faulty phone system at the institution. Mrs. Callingham's tongue is ripped out of her mouth during her sleep, although Dr. Masters tells Charlotte that Mrs. Callingham did it to herself. The audience later discovers that Dr. Masters is actually a patient at the institute, and that Dr. Stephens had allowed her to pretend to be a doctor. Dr. Masters burns the Sergeant's hand after he disobeys her, and murders Jennifer for stealing medicine. After a frantic conversation with Allyson, Charlotte discovers Dr. Masters' secret. Mrs. Callingham indicates to Charlotte that it was Masters who cut out her tongue, apparently to prevent the elderly woman from disclosing the secret. Charlotte then discovers the body of the telephone man in the kitchen closet, presumably murdered by Masters to make sure he would not report the institution's location to anyone on the outside. Allyson is distraught, as she thought the man was going to marry her, but she convinces herself that the man is still alive and drags his body to her room so she can have sex with it.
Charlotte realizes that her life is in grave danger, and she tries to escape. Judge informs her that they all know Masters is a patient, but that they think Charlotte is a patient also. Charlotte finds that all the windows and doors have been boarded by Masters, preventing an escape. Sam then leads Charlotte to the basement, where she is startled by a man grabbing her ankle and beats him to death with a toy boat. She realizes that it is Dr. Stephens, but not before finishing him off. Sam, at the direction of Masters, leads Charlotte upstairs, apparently so Judge can axe her to death. Sam thinks Charlotte murdered Dr. Stephens on purpose, so he helps restrain her. However, he has a flashback from his lobotomy (which Masters had assisted with), and lets Charlotte go. He then leaves the room as Masters cowers in a corner. As Sam leaves, the other inmates enter with weapons, and the Judge brutally axes Masters to death. Sam is deeply disturbed, and grabs the axe and proceeds to kill all the other inmates except Ms. Callingham, who is not in the room. Charlotte is already outside, having been told of a secret exit in the basement by Sam. She wanders around outside as the camera goes back to Sam, who, while eating a popsicle and viewing the carnage, cries to himself.

Question: What kind of institute is Stephens Sanitarium?
Answer: Mental health