Atos, the private company quitting its contract to provide assessments for employment & support allowance claimants, warned that its successor will fare just as badly unless the government improves the system it has to run.
Its senior staff says the system needs to change when they were questioned by MPs at the Commons' Work and Pensions Select Committee on Monday (9 June).
Atos chiefs complained that it and its staff had suffered a public "vilification" simply for carrying out what was asked of it by ministers and suggested other companies would find it hard to recruit staff unless changes were made.
While campaigners welcomed Atos's withdrawal, they also said the change should be used to "move away from a fundamentally flawed system".
Senior Vice-President of Atos, Lisa Coleman, told the committee it was "difficult to see" any improvements unless the government accepted its own policy was part of the problem.
"I think it would be a real shame if moving to a new supplier wasn't taken as an opportunity to do things in a different way.
"It is very difficult to understand that somebody with a very challenging or quite a difficult condition doesn't go through the process as you might expect.
"It is the decision-maker in the department who makes that decision and we would look for a lot more transparency around that whole process including 'what do these descriptors mean, what is the potential outcome for people with some quite difficult conditions?'
"It is massively over-simplistic to say that a new provider is going to fix all the issues. There are other things that need to happen."
Helen Hall, Head of Communications and Customer Relations, pointed to the high turnover of medical assessment staff as something any future provider would struggle with.
More than a quarter are quitting at present – many within the first six months – in the face of public anger directed at them, she said.
"The level of intimidation, the level of negative coverage about professional people … I'm not sure that's an issue that can be resolved by a new provider just throwing money at that."