Yes, I'm going to say better than the state hospital. I can't vouch for how well he'll be treated, or how good the treatment will actually be. But he's an adult. I'm going to take a shot in the dark, and guess he smokes a lot of pot to deal with his overwhelming anxiety, and his parents aren't too thrilled to have him at home because of that.
As long as he's being treated for mental health issues as opposed to substance abuse issues, I think he'll be ok, the hospital has all of the incentive to not screw him over too much. And if he has a panic attack, it's not like they're going to send him to the state hospital over a panic attack.
To conclude, I don't think he's being sent to a "program". He's being sent to a psychiatric facility that could either be terrible or decent. Unless his parents are going to pay out of pocket for the program and the hospital tries to keep him there involuntarily, if it's really that bad he'll be able to sign himself out.