The failure to protect whistleblowers remains a "stain" on the reputation of the NHS in England, MPs have said.
The Health Select Committee says the treatment of staff who raise concerns has undermined trust in the system.
And whistleblowers who are vindicated should receive an apology and "practical redress", its report adds.
The MPs also say the complaints system for patients is complex and confusing and there should be a "single gateway" covering health and social care.
The report says despite numerous inquiries and reports highlighting failings in complaint-handling and whistleblowing, serious shortcomings remain.
It emphasises the importance of ensuring health and care workers feel supported in raising professional concerns.
"The treatment of whistleblowers is a stain on the reputation of the NHS and has led to unwarranted, inexcusable pain for the courageous individuals affected," it says.
The report acknowledges there have been some attempts to create an open culture, where staff are encouraged to raise concerns, and there is a proper response.
But it concludes these initiatives are "far from common", and warns other potential whistleblowers may be deterred from coming forward.
"This has undermined trust in the system's ability to treat whistleblowers with fairness. This lack of confidence about the consequences of raising concerns has implications for patient safety."
The MPs are calling for a programme to identify whistleblowers whose actions are proven to have been vindicated. They say they should receive an apology and "practical redress", which could mean financial recompense, or - in some cases - getting their job back.
'Breakdown of trust'
They also highlight continued failings in the way the NHS responds to patients' complaints. They say despite some progress, the current system remains "variable".
Too many individual cases are "mishandled", they say, sometimes leading to a "complete breakdown of trust" between patients and the NHS, and a failure to improve patient safety.
They argue the current "overly complex" system should be simplified by establishing a single complaints gateway covering health and social care. They suggest this could be modelled on the Complaints Wales service run by the Public Services Ombudsman for Wales.
Alongside this they say there is a "strong case" for the creation of a single health and social care ombudsman for England.
Health Secretary Jeremy Hunt has welcomed the report.
"We want to make the NHS the safest healthcare system in the world and we know that listening to patients and staff is absolutely vital to improve care.
"That's why we've made hospitals legally obliged to apologise to patients when mistakes do happen, introduced complaints handling as a crucial element of tougher hospital inspections and have asked Sir Robert Francis to produce an independent report on how to create a more open NHS culture," he said.
Katherine Murphy from the Patients Association said the NHS must demonstrate it is prepared to listen.
"Complaints are like gold dust - they should be welcomed, they are telling you something is not right."
Peter Walsh from the charity Action against Medical Accidents, said he valued the MPs' recommendations, but warned that progress had been too slow.
"This is just the latest in a long line of reports and we now demand action to improve what has been a failing system."
The former NHS whistleblower Dr Kim Holt, founder of the charity Patients First, said the report was a first step in making much-needed changes.
"I am really pleased that a suggestion has been made that historic whistleblower cases are looked at and practical ways found of providing redress for them. That is a really amazing step forward, but the system needs an overhaul.
"We no longer want to see people on long-term suspensions, sick leave or dismissed for speaking up. The link between bullying and raising concerns is a close one and our key issue to be addressed is the one of bullying, which creates fear and desperation."