Excessive shedding this time of year is pretty common. With a GSD, Corgi, Cocker, and Boxer, I pretty much live in dog hair through spring and summer! haha.
What you're describing sounds to be a bit more than typical shedding to me, if you're seeing skin through the coat. I STRONGLY recommend adding fish oils to the diet, and really very strongly advise getting OFF Hills, as it's not actually formulated to "cure" anything, but rather mask real issues by producing solid stools.
Raw diets work WONDERS on dogs, but there are many many commercial kibble options that would still be far superior to Hills, and would more than likely give you better results. If not for the shedding, than for organ function, digestibility, coat and skin condition, and overall health... a food upgrade is in order!:biggrin: