Yes, hospitals should be allowed to refuse to hire employees who use tobacco as hospitals should think of the health of their patients first and foremost. An employee using tobacco may cause any sorts of unneeded dangers to a patient's health, so a hospital should have the right to refuse them employment.
I am not a smoker, however I have worked under stressful environment. Smoking is used as a stress reliever for many people; it is a bad habit to use as a stress reliever, however it is addictive and can be instantaneously helpful. To work in a hospital is extremely stressful; with very little breaks given during the shift; so you can't go and take a bath, you need a quick ciggie break to release some stress and then go back to work. Do you want your nurses and doctors to be grumpy at you because they can't release their tensions? No. It is not about the law, it is about personal choices. You can educate people about it's harm, however, (oh, the irony) health professionals all know about the harms.
Although the hospital setting may cause people to think that tobacco smokers should not be allowed to work there, tobacco use is not something that should be discriminated against. As long as the tobacco is smoked in an area far away from any patients, and the smokers are able to mask the scent on their clothes, there are no problems with having a habitual smoker work in a hospital.