Model-based prognostics approaches capture system knowledge in the form of physics-based models of components, and 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 decomposition approach adapted from the diagnosis community, called possible conflicts, in order to both improve the computational efficiency of damage estimation, and formulate a damage estimation approach that is inherently distributed. Local state estimates are combined into a global state estimate 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