I think you mean impetigo. I had it when I was about three - the blisters were not nice and I was not not allowed to mix with other children while it was contagious. I don't remember any treatment other than Vaseline.
It's a bacterial infection, often spread by sneezing (see attached) and most common in small children. It's nothing to do with insect bites.
Your doctor got it wrong this once, but please realise that the GP may not be an expert in dermatology - i don't seek to excuse the misdiagnosis but this may not be your doctor's expert area.
Advise the family that the baby must have separate towels and flannels, and scrupulous handwashing is a must. It lasted a few weeks as I recall before mine cleared up completely - there was no lasting skin damage.
Are you in the US? I only ask because you mention ER - we call it A&E here in the UK.