People on an island convined they are ill

This is the film from 80’s or 90’s (if I had to guess, I’d say ’91). The plot is of people who live on an island in a sort of a hospital. The family that controls the hospital brainwashes them to believe they have all kinds of illnesses. In particular, one girl is convinced that her vagina is a defect in her body. A guy builds a big bird out of matches and burns it at a culminating moment of the film. There are pipes everywhere with something resembling crap running through them. Most of the scenes look greenish.

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