Outcomes-Based Contracting

Outcomes-Based Contracting (OBC) is an agreement where a provider, such as a healthcare organization or service supplier, is paid based on the results they achieve rather than just the services they perform. For example, instead of paying a medical provider for every visit, the payment depends on how well a patient’s health improves. This approach aligns incentives to focus on delivering real value and desired outcomes, encouraging providers to prioritize effectiveness and quality. It shifts the focus from volume of services to the actual impact and value delivered.