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Medical imaging techniques such as Magnetic Resonance Imaging (MRI), Computed Tomography (CT) and Ultrasound (US) produce a large amount of digital medical images. Hence, compression of digital images becomes essential and is very much desired in medical applications to solve both storage and transmission problems. But at the same time, an efficient image compression scheme that reduces the size of medical images without sacrificing diagnostic information is required. This paper proposes a novel threshold-based medical image compression algorithm to reduce the size of the medical image without degradation in the diagnostic information. This algorithm discusses a novel type of thresholding to maximize Compression Ratio (CR) without sacrificing diagnostic information. The compression algorithm is designed to get image with high optimum compression efficiency and also with high fidelity, especially for Peak Signal to Noise Ratio (PSNR) greater than or equal to 36 dB. This value of PSNR is chosen because it has been suggested by previous researchers that medical images, if have PSNR from 30 dB to 50 dB, will retain diagnostic information. The compression algorithm utilizes one-level wavelet decomposition with threshold-based coefficient selection.
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