Hi and welcome

!
So, okay...first, we have to clarify a couple things in order to try to be helpful.
When was the chip injected? And when, exactly, did the hot spot later occur? In other words, why is the assumption that one caused the other...for sure...?
A "hot spot" is just a layman's term for an infection that is called pyoderma. Pyoderma is a localized bacterial "infection"/overgrowth (aka hot spot) -OR- a more systemic overgrowth of the skin's normal bacteria (the normal bacteria is called staph intermedius).
You CANNOT treat a bacterial infection with prednisone (a steroid) and Temaril-P (an anti-histamine with steroid). Bacteria can ONLY be treated with the appropriate antibiotic.
So, noting the above - what is the reason the vet is giving the pred and TemP...? It makes zero sense to me, clinically. Temaril-P is given to dogs w/ allergies.
Not only that, but this means your poor dog is getting
TWO pills that contain steroids - so I'm really *not* surprised she is now losing fur. Medically, giving this much steroid could cause Iatrogenic Cushings Syndrome......
.......and guess what Cushings Syndrome causes....? Fur loss, recurrent infections, and a plethora of many other unrelated symptoms. Read more
HERE.
I hope this all isn't super confusing. If it is, the bottom line is this: it's possible that the meds your Vet keeps giving is the very thing that's causing BOTH hair loss and recurrent infections in the skin!
If I were you - first, I'd switch vets asap. Then, I'd get a skin scraping of the "hot spot" to confirm it's bacterial (this is a cheap/easy/quick test). Local spots can be treated with Muciprocin ointment. If there are other areas of pyoderma on the body...then you'd want to treat w/ oral Simplicef x 30 days.