For e.g. if you have outsourced to a company for 10 developers working full time, how would you know whether 10 developers are working on your project and how would you roughly validate the hours billed?
The federal government (US, though I imagine it's the same everywhere) has forms and standardized time sheets that their contractors fill out, all employees on the job sign their timesheets, and there are big penalties for faking them and getting caught. But, unless you want to spend hours dealing with the paperwork that your contractor produces, you probably don't want to go down this path. And, of course, you almost certainly do not have the legal clout of the federal government, and so even if you "catch" your contractor in an overage, there's probably not much you can do about it.
I generally get per-job quotes (or at least estimates, with a requirement that they get my sign off on more than 10%-20% overage), rather than per-hour. For very large projects this is not possible...but it's probably worth trying to break the project down into many small deliverables with mostly preset prices.
ODesk allows you to peak over the shoulder of your contractor. But, I can't even imagine the sort of person that would take a job with that kind of intrusive requirement. Good contractors are in it for the freedom, rather than the high pay, and so if you can peek over their shoulder while they work, you're probably getting a corporate cog at independent contractor rates, which is not a good deal.
Also, it should be free for you if you just have one project and are only using contractors. It is true that they could just leave it on for a while, but if they have to submit notes while they track time, it would be a pretty big pain in the arse for them to constantly fake things.