Systems health management (SHM) is an impor- tant set of technologies aimed at increasing system safety and reliability by detecting, isolating, and identifying faults; and predicting when the system reaches end of life (EOL), so that appropriate fault mitigation and recovery actions can be taken. Model-based SHM approaches typically make use of global, monolithic system models for online analysis, which results in a loss of scalability and efficiency for large-scale systems. Improvement in scalability and efficiency can be achieved by decomposing the system model into smaller local submodels and operating on these submodels instead. In this paper, the global system model is analyzed offline and structurally decomposed into local submodels. We define a common model decomposition framework for extracting submodels from the global model. This framework is then used to develop algorithms for solving model decomposition problems for the design of three separate SHM technologies, namely, estimation (which is useful for fault detection and identification), fault isolation, and EOL predic- tion. We solve these model decomposition problems using a three-tank system as a case study.