Of course John hasn't literally turned 'orange', it's a term used in the hospital for patient classification. 'Orange' refers to patients who are:
...experiencing violent outbursts or thoughts.
...considered a danger to themselves or to others.
...withdrawn, irrational and extremely uncooperative.
...displaying signs of extreme psychotic behaviour: hallucinations (audio or visual); excessive self-harm; uncontrollable sexual impulses; self-defecation; nodding along in agreement with Fred Phelps.
Well, that's the official explanation, though what it really means is that John's a ticking time bomb waiting to go off. It also means that he won't be out anytime soon; not of his own accord anyhow. Going from yellow to “orange” removes the liberty to sign oneself out. John is now confined under the mental health act. He's actually been certified insane.