What are some of the challenges we face as a society in understanding mental illness? how might those challenges be better addressed?

People avoid what they feel they have a right to be afraid of and most people will also avoid what they do not understand. If you don't have a relative, co-worker, good friend who has come out to you as coping with mental illness (because you do have all of those in your life), or if you do not have personal experience with mental illness of your own, you will unfortunately get your information from those who are not able to adequately educate you about mental illness. 
There is little to no good coordination of care for those with mental illness. Hospitals, psychiatrists, and treating therapists may never communicate with one another, much less develop a treatment plan together or with input from all concerned parties. This is akin to having cancer and your oncologist, cancer treatment center, and primary care physician never consulting or communicating with each other. Certain recommendations following from the Affordable Care Act will attempt to fix this coordination problem. 
These are just a few of the issues that those diagnosed with mental illness face in our society. I have focused on the more "macro" issues, as the "micro" issues vary from person to person, but are no less significant and may include discrimination and shunning by families, churches, and communities; concerns about how to share that one has a diagnosable mental illness with a potential partner, concerns about whether to have biological children, and more.

Agovernment that follows the will of people