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With the advancements in modern medical imaging systems, the diagnostic image data has increased exponentially. The future medical applications seek medical imaging devices to be portable. Image quality and real-time processing are of prime importance in medical image compression. Therefore the volumetric medical images need to be compressed in perceptually lossless manner. Also the time taken to compress the images before transmitting (or storing), should be small. In this paper, an algorithm for lossless and perceptually-lossless medical image compression is proposed. The proposed algorithm uses two small lists and two small state-tables to encode an image. The compression efficiency is comparable to the state-of-the-art lossless compression techniques. Also the computational complexity and memory requirement are realistic for portable medical imaging devices. Combining all the three features …