Phenol has antiseptic properties, and was used by Sir Joseph Lister in his pioneering technique of antiseptic surgery, though the skin irritation caused by continual exposure to phenol eventually led to the substitution of aseptic (germ-free) techniques in surgery. It is one of the main components of the commercial antiseptic TCP.
Phenol has anesthetic properties, and is the active ingredient in some oral anesthetics such as Chloraseptic® spray.
Yum. Anyway, it appears hospitals have never really stopped using it, but found other applications for it. Wikipedia again:
Used as a "scrub" for pre-operative hand cleansing. Used in the form of a powder as an antiseptic baby powder, where it is dusted onto the belly button as it heals. Also used in mouthwashes and throat lozenges, where it has a painkilling effect as well as an antiseptic one.
According to a fictitious but well-researched account I read, surgeons stopped soaking their hands in acid about the same time rubber gloves came along, around 1885. Instead they scrub well and may rise with a mild phenol solution. Today most surgical procedures prevent infection by operation in a sterile environment, with metal instruments that can be sterilized. Any after-infections are treated with antibiotics and antiseptics.