A FEW homeless people who exhibited signs of mental illness were taken off the streets of New York City last week. Under a new city program, they will be provided with hospitalization and psychiatric help. This is only a first--and small--step to aid victims of mental illness.

New York City's program does not ram the mentally ill into institutions. Instead the program gets the extremely ill into the hands of evaluators; who can prescribe treatment and locate housing in community residences for their patients. Opponents to the plan, lead by the American Civil Liberties Union, charge that the program constitutes a violation of individual rights. But the program only plucks those who do violence to others or themselves, and they can be held for no more than 90 days. People who are in need of help will get it now, whereas before the city was powerless to help them.

But most of the mentally ill--who number 10 million, or 6 percent of the population--are not wandering the streets, dangerous and delirious. Most suffer quietly and not so quietly in their suburban homes, city apartments, workplaces and families.

Some take medication to tone down their pain, but it is never fully alleviated. Some strike out, verbally and physically, at family members who don't know how to help them. Most are ravaged by an internal war. Their emotions tear them up, and they wreak havoc on their careers, relationships and desire to live.

The most extreme cases end up on the street, with no family to care for them and no impetus to care for themselves. The new New York City program addresses their needs.

But most mentally ill people, who suffer to a lesser degree, are just as needy of aid as those on the street. Just as bright and talented as the non-mentally ill, their contribution to society is stymied by their illness. College educated mentally ill languish in their destructive thoughts--not working, not getting out of the house, not really living.

CARE FOR the mentally ill has been treated as an all or nothing solution. First, the mentally ill were left to rot in human warehouses. Then they were deinstitutionalized and largely left to cope alone, without psychiatric care.

"Deinstitutionalization looked good on paper but no one prepared for it in reality," said one overworked social worker. Busy with casework and fundraising, he temporarily neglected one of the hundreds of people he was charged with monitoring and lost the man to suicide.

State agencies have failed to follow up on most deinstitutionalized patients. The ones they do follow up on are handed off to caseworkers, each of whom shoulders a caseload of more than 100 patients. That's more than any one caseworker could ever keep track of, much less help.

The state doesn't offer enough shelters for the mentally ill, and those it does provide often just offer "3 hots and a cot"--no professional psychiatric help, no career training, no personalized attention. Sheltered patients may get periodic check-ups and medication, but that isn't enough to turn their lives around.

No one wants a return to the institutionalization of the past, which stripped patients of their rights and did little to rehabilitate them. Three years ago, a study by Senator Lowell Weicker found that many institutions have reverted to the custodial care of yesteryear.

MOST MENTALLY ill don't need the government to come to get them; their needs transcend buildings and beds. What they require is more community care. Employers should have incentives to hire, train and supervise the mentally ill. Day-care facilities, with psychiatric help, medical services and job training, must be more accessible. Now they are few and far apart, and often funding doesn't follow patients to the most convenient facilities.

In half-way houses staffed by social workers, the mentally ill can receive close personal attention and care. There they handle household duties and get job training that will ease their transition to the mainstream when they are ready.

Few of these residences exist. Funding is scarce and so is staffing. Worse yet, neighborhoods refuse to accept the residents of these homes as neighbors. Zoning laws on non-family cohabitation often bar them from setting up in nice residential areas, shunting them off to dismal commercial zones.

Little steps, like the New York City plan, are signs that officials are concerned about helping the mentally ill. The ambitious programs coursing their way through state legislatures to fund more care facilities are even bigger steps. But until concern for solving the problem permeates each neighborhood, each business and each government as deeply as does the illness itself, there will be little progress.