Patients or prisoners at home with friends (7)
I believe the answer is:
inmates
'patients or prisoners' is the definition.
(people confined to hospital or prison)
'home with friends' is the wordplay.
'home' becomes 'in' ('he's home' can mean 'he's in').
'with' is a charade indicator (letters next to each other).
'friends' becomes 'mates' (mate is a kind of friend).
'in'+'mates'='INMATES'
'at' is the link.
(Other definitions for inmates that I've seen before include "Prisoners" , "Inhabitants" , "Ties man (anag.)" .)