The government is planning a "dramatic reduction" in the number of people with learning disabilities kept in hospitals in England, Care Minister Norman Lamb has told MPs.
Boards, directors and senior managers at private hospitals who allow abuse to take place will face tougher sanctions - including possibly criminal prosecutions, he said.
The move follows the abuse of patients by staff at the Winterbourne View private hospital, near Bristol, which was uncovered by BBC Panorama.
Mr Lamb told MPs on 10 December 2012: "I regard it as a national imperative that we transform the care of those with learning disabilities or autism and behaviour that challenges."
His statement came on the same day the government published a report on the Winterbourne View scandal.
Mr Lamb said the then-owner of Winterbourne View, Castlebeck, should consider its position on the costs of inquiries into the criminal behaviour of staff at the private hospital which have so far been borne entirely by the taxpayer.
Liberal Democrat former care minister Paul Burstow called for a review of the law to ensure that firms could be held to account.
Referring to Winterbourne View, he said: "It's not good enough for the thugs who did this to be in the dock and receive a criminal conviction, the company itself has a criminal responsibility and should be held to that standard and brought to court as well."
Liz Kendall said Labour broadly welcomed the report and the proposals set out by the government.
The shadow care minister told the Commons: "Our goal must be to ensure everyone with a learning disability or autism, including those with challenging behaviour, receive high quality, decent and humane care and support.
"We must finally end the practice of sending people to long stay institutions far away from their family and friends."