The way schools purchase products and services, such as educational software and tutoring, plays a crucial role in student learning, some policymakers argue. Instead of simply paying vendors for delivering these services, many school districts are now adopting outcomes-based contracting. This approach ties part of a vendor’s payment to student usage and achievement of academic goals, encouraging schools and vendors to focus on the effectiveness of these interventions.
Outcomes-based contracts, familiar in healthcare, are gaining traction in education, especially in tutoring and educational technology. Since the pandemic, this method has expanded rapidly. A Michigan law now mandates this contract type for accessing a $50 million fund for online tutoring. Florida, Texas, and California, along with over 20 other states, are exploring this approach, according to the Center for Outcomes Based Contracting.
The first independent evaluation of outcomes-based contracts reveals both promise and caution. WestEd researchers examined programs in eight districts across California, Florida, Mississippi, and Texas from August 2024 to March 2026. Three interventions showed academic gains, yet the study couldn’t definitively credit the contracts for these outcomes.
The challenge in education is determining if specific interventions caused improved learning. To assess the impact of tutoring or educational software under outcomes-based contracts, WestEd compared students just below an eligibility cutoff who received the intervention with similar students above the cutoff who did not. Of ten interventions, only four could be rigorously analyzed, with three showing positive effects. An online tutoring program ran too briefly to yield measurable gains.
Student performance improved in three interventions covered by outcomes-based contracts
For six interventions, researchers struggled to compare similar students due to typical school practices. Schools often filled tutoring spots with higher-achieving students or failed to ensure eligible students attended after-school programs. One district allowed all first graders access to reading software if they scored below perfect on kindergarten assessments.
Targeting interventions to the right students
An AI-powered reading software yielded intriguing results. Second graders using the AI tutor were more likely to achieve reading proficiency than similar peers without it. However, the program didn’t benefit older students. Brittany Miller, executive director of the Center for Outcomes Based Contracting, noted, “That’s a really important finding because that tells us what’s working for whom and under what conditions.”
The mixed outcomes of outcomes-based contracts highlight the need for precise intervention targeting. Not every student requires equal exposure to educational technology products.
Attending to implementation
WestEd researchers observed significant changes in implementation. Schools and vendors regularly reviewed data and monitored student attendance in tutoring sessions. But the evaluation couldn’t determine if these improvements were due to contractual financial incentives or the extensive support from the Center for Outcomes Based Contracting. Each district received about $80,000 in coaching and technical assistance.
The evaluation tested outcomes-based contracting with intensive support, not the contracts alone. Future research aims to see if similar results can be achieved with less outside support. Researchers also noted unexpected benefits; districts began using data systems developed for these contracts to track other interventions.
Outcomes-based contracting can’t replace academic research but can help schools identify effective interventions in real-time. Although the evaluation didn’t prove cost savings, it showed contracts can reshape how districts monitor and learn from purchased programs.
—
Read More Kitchen Table News
