The Buffy episode Normal Again?

In this episode- buffy is injected by a demon that causes hallucinations that she is in a mental clinic. Later in the episode we learn she was actually institutionalized before the show started. At the end of this episode, buffy is in the hospital and that buffy completely gives in to the hallucinations. In the other reality she snaps out of it- kills the demon and saves the day. the problem here is that at the VERY end of the episode, it flashes back to the hospital and the doctors say something like "shes gone". I want to know, which reality is true to the show. Is all of it just a hallucination, or where the hospital visits some ghastly visions?