The Instructor is misleading her students. "Employers [do] not want to hire CPC" is simply an untrue statement.
There are some facts here that must be covered first.
A.) Coding certification is not absolute. Essentially, each coding credential is a "specialized" one. There is no single coding credential that covers all coding, across all settings. For example, coders in the nursing home settings have no option for certification in their specialty. The AAPC webiste states that the CPC is a physician/provider-based coding cert. Hospitals are usually looking for facility-based coding certifications, as those credentials apply to their line of business & clinical setting.
B.) You don't go to your family practitioner for coronary artery bypass grafting. The same concept applies to coding credentials. Hospital certified coders generally code in the hospital (e.g., CPC-H, CCS) and physician certified coders (e.g., CPC, CCS-P) usually code in provider-based settings (e.g., clinics, offices, billing units, etc). It is normal to have certification in the market where you expect to work. So, to some extent, those with the CPC are not necessarily appropriate for the hospital coding environment. Their certification is not in hospital coding.
C.) Some hospitals' administration (as Rhonda alluded to) are simply ignorant of the AAPC credentials applying to the hospital environment. Keep in mind that the "old guard" still exists: AHIMA for Hospital, AAPC for Outpatient and Physician. There is probably still some confusion as people tend to stick to their belief systems. AAPC is making attempts at changing that, so be patient, be mindful of it and do your part.
D.) If you want to code in the hosptial, physician office, home health, or anywhere else, seek certification specific to that setting. This means that if you're a CPC who wants to pursue the hospital side of the fence, it might be a good idea to use the CPC-H as a means to that end. I agree with em2177, some employers expect multiple credentials. This requires work on the candidates part and determination to succeed. If you want to fully pursue all your options, then you'll probably need multiple certifications.
Good luck to all and remember, advice is only as good as its source.