What is a word that means "to make sane"?
Rationalize, to make it rational, to apply logic or reason to something.
You can also consider clarify, to make something easy to understand.
Rehabilitate? Has both the feel of "fix" and institutionalization...
Sanify is an English word, albeit rare, which means to make something healthy/healthful. (Merriam-Webster, Collins)
I think it can be useful as an alternative to sanitize which is usually interpreted as making something clean (Merriam-Webster, Collins), although both have the same root in the Latin sanus (health).