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Munchausen syndrome by proxy is when a parent or caregiver gives a false account of a child's symptoms or fakes signs. This may lead to needless, repeated investigations and treatment. The child may be exposed to significant risks, as well as suffer disruption of their education and social development. The adult involved gets some sort of gain from attention by medical authorities.
Some children may collude in the production of signs and symptoms and some may later develop adult Munchausen syndrome.
Note that it is important to have a clear impression who has the problem. The diagnosis is applied fairly loosely to the child - who clearly has pathology as a result of this form of abuse. However, the person who really has the problem is the parent or caregiver; but the adult clearly doesn't have anything "by proxy". It is for this reason that a change of name has been suggested, to Meadow's syndrome for the children.
Although widely reported as such in the press, Beverly Allitt, who was convicted of killing children whilst working on a neonatal unit in the UK, did not have Munchausen Syndrome by proxy. For one thing, the diagnosis, as discussed above, usually applies to the child. Secondly there was no secondary gain or attention to herself. Although Ms Allitt was said to have Munchausen syndrome, she did not have it by proxy, nor did she seem to inflict it.