Based on Outcomes? Challenges and (Missed) Opportunities of Measuring Social Outcomes in Outcome-based Contracting

Although outcome measurement is a key element of outcome-based contracting, the main challenges related to the measurement processes in these programs are still under-investigated. To fill this gap, this article examinates the challenges and opportunities of measuring social outcomes in outcome-based contracting, focusing particularly on three main areas: the design of measurement processes; the definition of outcomes, metrics, and targets; and the practical implications of the measurement processes. The analysis focuses on four case studies in the UK. Regarding the measurement of payment outcomes, our results bring into question the viability of outcome-based contracting for providing evidence that can inform policymaking. However, the results highlight the opportunities emerging from the measurement of outcomes not related to the payment mechanism and from involving different stakeholders in the measurement process. Finally, we discuss future research on the influence of governance and bargaining power on the measurement of outcome-based contracting.