Thank you for the feedback! No, you played it correctly. It ends on a downer. I really wanted to make multiple endings, but I got extremely sick the last day of the jam. I originally planned for a happy ending where the door in the asylum opens at the very last second and you are able to escape. From there the character would 'wake up' like it was all a nightmare. I'm definitely going to add all of the suggestions I got from the comments here after the jam is over though. Maybe I will add that ending in as well.
There is one easter egg that no one has mentioned. Maybe some people have found it, it's rather cheesy. I figured someone might want to try it. (Spoiler) If you stay crawling on the second level, the chase one, the monster will walk right over you and you can return back to the stairs for the easter egg.