Hotspots are caused by a skin condition called pyotraumatic dermatitis that some dogs may acquire. It is a very itchy condition which results in dogs sometimes biting themselves in the area to try and relieve the itch. There is a chance the steroid treatment may not have worked the way it was intended. A delay in taking care of this will allow it more time to spread and get worse. A followup trip to the vet would be a good idea to make sure it is taken care of fully.
Saturday, 8th August 2009