Model-based prognostics approaches capture system knowl- edge in the form of physics-based models of components that include how they fail. These methods consist of a damage estimation phase, in which the health state of a component is estimated, and a prediction phase, in which the health state is projected forward in time to determine end of life. However, the damage estimation problem is often multi-dimensional and computationally intensive. We propose a model decom- position approach adapted from the diagnosis community, called possible conflicts, in order to both improve the com- putational efficiency of damage estimation, and formulate a damage estimation approach that is inherently distributed. Local state estimates are combined into a global state esti- mate from which prediction is performed. Using a centrifugal pump as a case study, we perform a number of simulation- based experiments to demonstrate the approach.