Hashtags are a clever convention invented by Twitter users.  They can be extremely useful, but excessive use of these can make a post harder to scan/read.  If you overuse hashtags consistently, your followers will skip your posts and, eventually, stop following you altogether.  Learn to strike a balance.

Hashtags are a great aid to searchability and discoverability.  Adding #healthcare to a post makes it a lot more likely to be found by people interested in that subject, whether or not they follow you.  This user-invented convention has worked so well that most Twitter clients, including Twitter's own web client, have added support for it by making hashtags directly searchable (i.e., you can click on them to search for other posts using the same hashtag).

That's great, but like anything in this world, it is possible to have too much of a good thing and that's true for hashtags as well.  One negative aspect of hashtags and other symbols is that they can make posts harder to scan/read, particularly when they're over-used.

As it is for other online content, people don't really read tweets, they scan them.  If something catches their attention, then they read it a bit more carefully.  But still, the dominant behavior is to quickly move from one post to the next, looking for interesting posts.  Anything that breaks that rhythm is perceived an annoyance, to be avoided.

Some people, mostly newbies, go overboard, sprinkling hashtags throughout their posts and turning just about every word into a hashtag.  Uhg!

Too many #tags interspersed with the text makes more difficult to scan a post; each # makes it harder to quickly parse the tweep. Some popular clients even render #tags in light gray, making it even harder to read.

For these and other reasons, it works best to put hashtags at the end or beginning of a post.  Luckily, that's also the common practice for the most part.

Good Uses for Hashtags

1. Make the implicit explicit.  For example,
   • A post about a great "app" may need to also include #iphone to make it clear which platform the app runs on.
     
   • A post about a science fiction story may need to include #scifi to place it in the category.
     
2. Expressing the poster's opinion.  For example,
   • Posting about a big screw up (#fail)
     
   • Posting a funny video (#funny)
     
3. Event-related tags.  For example,
   • A post about twiistup, The Entrepreneurs Showcase
     
   • A post about the San Francisco New Tech events (sfnewtech)
     
4. To comment on a trending topic.  For example,
   • To comment on a real-time situation, as in the San Diego fire of 2007 which sparked the use of hashtags
     

When Not to Use Hashtags

When a post includes brand names, they don't need to be turned into hashtags.  If people are interested in Dell, they are going to search for "dell" rather than "#dell."

Not Just Hashtags

BTW, the same applies to other symbols, like brackets, dashes, slashes, etc.  They can't always be avoided and many times they are an intrinsic part of the message.  The trick is not to overuse them.