In July, 1926 Mrs. John Reno established the Caro City Hospital in a private home on East Frank Street.  Her efforts in caring for the sick brought praise from patients and physicians. However, the endeavor did not succeed financially.

Doctors R. L. Dixon and Charles N. Race, charter members of the Caro Rotary Club, brought the hospital's plight to the attention of club members.  A committee consisting of Dr. R.L. Dixon, Mr. C.A. Klein and Mr. S. R. Park was appointed to make a study of the hospital and its potential for success.  Mr. E. J. Riley, President of the Caro Board of Commerce, also appointed a committee to work with the Rotary group.

The combined committees were unanimous in the opinion that Caro could not afford to lose its hospital, believing that the loss of the existing hospital would make it extremely difficult to organize another in subsequent years.