Medical imaging has started to take advantage of digital technology, opening the way for advanced medical imaging and teleradiology. Medical images, however, require large amounts of memory. At over 1 million bytes per image, a typical hospital needs a staggering amount of memory storage of over one trillion bytes per year and transmitting an image over a network, even the promised superhighway could take minutes which is too slow for interactive teleradiology. This calls for image compression to reduce significantly the amount of data needed to represent an image. To meet this challenge, we developed a hybrid compression scheme that provides almost lossless compression with easily hardware realizable due to its simplicity having the better results of PSNR, MSE, and COC.